Preamble

The House met at Half past Two o' Clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

RIVER GREAT OUSE (FLOOD PROTECTION) BILL

Lords Amendments considered, and agreed to.

Oral Answers to Questions — MINISTRY OF SUPPLY

Aircraft Contracts

Mr. Geoffrey Cooper: asked the Minister of Supply what contracts have been placed with the Bristol Aeroplane Company on a cost-plus basis either for development work or otherwise; and what is the value of such work divided under the headings of development contracts and supply of civil or military aircraft and components during the years 1947 and 1948.

The Minister of Supply (Mr. G. R. Strauss): It would be contrary to established practice to give details of contracts placed with a particular firm.

Mr. Cooper: Is my right hon. Friend aware of any extensive under-employment at this factory and what steps does his Department take, since the cost-plus basis is admitted to be such an expensive way of placing-contracts, to keep a check to see that this under-employment is not charged to Government contracts?

Mr. Strauss: Wherever possible no cost-plus contracts are given. It is only sometimes when the costs are quite unpredictable that we are forced to agree to such contracts, but we avoid them wherever possible.

Hawker Aircraft Company (New Factory)

Mr. Boyd-Carpenter: asked the Minister of Supply if he will make a

statement as to the reasons for his authorisation of the move of certain of the work at present done by Hawker Aircraft in the Royal Borough of Kingston-upon-Thames to Blackpool; and if he first consulted the Minister of Labour as to the effects of the move on employment there.

Mr. G. R. Strauss: An application by the Hawker Aircraft Company for a lease of the Squires' Gate Factory, Blackpool, has been approved, subject to agreement on terms. The firm needs more production space and an airfield to replace their present establishment at Langley, where facilities have become progressively inadequate for their needs. Blackpool meets both of these needs. My right hon. Friend the Minister of Labour has been consulted from an early stage.

Mr. Boyd-Carpenter: Can the right hon. Gentleman indicate whether his right hon. Friend the Minister of Labour expressed any opinion as to the effect of this move on employment?

Mr. Strauss: My right hon. Friend is fully aware of this move. There is not likely to be any effect on employment either at Blackpool or at the firm's present place for at least a couple of years.

Mr. W. R. Williams: Before these decisions are made, what consultation takes place with employers and with the trade unions concerned in regard to the treatment of any redundancy which arises, a matter which is becoming serious in some of these localities?

Mr. Strauss: The firm is moving from an area where there is considerable congestion and a considerable demand for labour to an area where there is unemployment.

Mr. A. R. W. Low: Does the right hon. Gentleman's answer mean that there will not be any effect on unemployment in Blackpool for two years? May not he be wrong about that and may not the unemployment situation in Blackpool become better soon? Is he aware that the decision of Hawker Aircraft to occupy the factory will meet with the approval of everyone in Blackpool?

Mr. Strauss: There will be no immediate effect on unemployment in Blackpool, except for a small number, but in two years' time it will be substantial.

Mr. Boyd-Carpenter: Does that answer mean that there will be a substantial adverse effect on employment at Kingston-upon-Thames?

Mr. Strauss: No, Sir. It is hoped and expected that there will be alternative work for these people.

Dr. Segal: In view of the long delay there has been in finding a tenant for this very valuable factory space, is my right hon. Friend aware that he ought to be congratulated on at last persuading Hawker Aircraft to move over to that area?

Aeronautical Research

Mr. Erroll: asked the Minister of Supply what is the present cost of research on civil aircraft development and ground control problems for civil aviation.

Mr. G. R. Strauss: A large part of the expenditure on aeronautical research and development is of benefit to both civil and military aviation. It is not, therefore possible to give a separate figure for the former.

Mr. Erroll: Can the Minister answer that part of the Question relating to ground control problems?

Mr. Strauss: Ground control is common to both.

Raw Materials (Trading Account)

Sir Waldron Smithers: asked the Minister of Supply when he expects to furnish the Trading Account, 1948–49, for raw materials to the Comptroller and Auditor General.

Mr. G. R. Strauss: Before the end of this month.

Sir W. Smithers: Is the Minister aware that he has contravened the Exchequer and Audit Departments Act, 1921, by not presenting his accounts before 30th November? Is he also aware that Socialist administration must and does break down, and that this is creating chaos in the country?

Mr. Strauss: I cannot agree with the hon. Member. These accounts have been slightly delayed because we were waiting for the report to be sent in by a number of professional accountants. The draft accounts were submitted to the Treasury

before the end of November, and the final and completed accounts will be submitted before the end of this month.

de Havilland Comet (Financial Assistance)

Mr. Beswick: asked the Minister of Supply what assistance financially, from public funds or otherwise, has been given towards the development of the de Havilland Comet.

Mr. G. R. Strauss: The total expenditure incurred by my Department which has contributed to the development of the de Havilland Comet is estimated at about £4 million. The main item is the cost of developing the Ghost engine which can, of course, be used in other aircraft. Other items include the three prototypes of an aircraft known as the D.H.108, built to obtain experience of the aerodynamic problems involved in the Comet project. As my hon. Friend is aware, my Ministry is the purchaser of the Comet aircraft now flying and also of the second aircraft nearing completion. The price of these two Comets, which will be used for experimental purposes, is included in the £4 million. That figure does not however, cover the cost of basic research work, wind tunnel tests, etc., carried out in Ministry of Supply Experimental Establishments. I am not aware of any financial assistance to de Havillands on this project otherwise than from public funds.

Mr. Cooper: Since my right hon. Friend has given details of a contract with a private firm in this case, could he not do the same in the case of the Question I put to him earlier? In any event, can he say how much of this contract was on a cost-plus basis, which we know to be so wasteful?

Mr. Strauss: I was not giving the contract with de Havilland's but was estimating the amount for development and research which has gone towards the building of the Comet aircraft.

Air-Commodore Harvey: Does the right hon. Gentleman not agree that a large return will be obtained from this investment for military aircraft, and does he not further agree that his Department is getting full value for money?

Mr. Strauss: Yes, I fully agree with everything that the hon. and gallant Gentleman has said.

Mr. Beswick: While I fully agree that we are getting value for money, can my right hon. Friend say how many of these fine aircraft are now on order by this country and others?

Mr. Strauss: No, Sir. The Ministry of Civil Aviation has a number on order and my Department has on order the first two for experimental purposes, as I have mentioned.

Atomic Bomb

Mr. Emrys Hughes: asked the Minister of Supply whether this country is now able to manufacture the atomic bomb.

Mr. G. R. Strauss: It would not be in the public interest for me to answer this Question.

Mr. Hughes: Could the Minister tell us whether this information was revealed to the Leader of the Opposition in the recent conversation, or is the Leader of the Opposition being left in ignorance, too, for security reasons?

Mr. Strauss: That question should be addressed to the Prime Minister.

Mr. Beswick: Can my right hon. Friend tell us exactly in what way the public interest is served by withholding this information?

Mr. Strauss: The development on any defence project is always withheld from public information, I should have thought for obvious reasons.

Mr. Platts-Mills: Is it a fact that the Americans have told us quite positively that we are not to use the knowledge we have, and are not to be allowed to make the bomb?

Mr. Strauss: The hon. Gentleman seems to be better informed than I am.

Mr. Blackburn: May I ask my right hon. Friend, with great respect, whether he will review this secrecy provision in relation to atomic energy, because it is the generally-held view among American scientists that to get rid of secrecy would enable us to get on more rapidly with the project?

Mr. Strauss: There is no secrecy regarding technical information on basic atomic research. I know that every effort is made to see that that is not secret.

Mr. Sydney Silverman: Since it is known that the United States of America can make it, and since it is also known that the Soviet Union can make it, and since neither country thinks it inconsistent with its public interest to have those facts known, why should it be against the public interest to know whether we can make it or not?

Oral Answers to Questions — MINISTRY OF WORKS

Requisitioned Hotels

Sir Ian Fraser: asked the Minister of Works how many of the 94 hotels held by his Department on 30th September last does he propose to release in time for conversion to normal use in next year's summer holiday season

The Minister of Works (Mr. Key): The number of hotels held by my Department on 30th September last was 64. Approximately 12 will have been released in time for conversion to normal use by next summer; of these seven have been released since September.

Sir I. Fraser: With regard to the remaining 52, in view of the uneconomic cost of building hotels, and the dollar-earning capacity of this industry, will the right hon. Gentleman study each case to see whether he cannot expedite release?

Mr. Key: Yes, and our desire is to release them as soon as possible.

Building Industry (Working Party)

Mr. Platts-Mills: asked the Minister of Works if he has now received the report of the Working Party on the Building Industry which was appointed in July. 1948; and if he proposes to publish this document.

Mr. Key: No, Sir.

Mr. Platts-Mills: As the Minister said in May that he hoped this report would be available at the end of this year, and as the prices of building materials are still mounting steadily, will my right hon. Friend see what can be done to speed up the report?

Mr. Key: I understand that the report is in preparation, and I shall probably receive it early in the New Year.

Twinwood Camp, Bedfordshire (Conditions)

Mr. Skeffington-Lodge: asked the Minister of Works whether he is aware of the unsatisfactory conditions obtaining at the Twinwood Camp, Clapham, Bedfordshire, a hostel for workers at the nearby Aeronautical Research Station; and whether, in view of the widespread dissatisfaction caused by these conditions, he will take some early action to investigate and remedy them.

Mr. Key: No, Sir. I am not aware that conditions at Twinwood Labour Camp are unsatisfactory. If my hon. Friend has any details in his possession, I will have the matter investigated.

Mr. Skeffington-Lodge: May I give my hon. Friend one or two details now for his investigation? May I ask him whether he is aware that there are no sheets on 300 beds, that the blankets on those beds are never changed—

Mr. Speaker: The hon. Gentleman appears to be giving information and not asking for it. That is not the point of Questions.

Mr. Skeffington-Lodge: On a point of Order, Mr. Speaker. Owing to the fact that the Minister does not appear to be aware of the information I have, I beg to give notice that I shall raise this matter on the Adjournment in order to provide him with the details which he ought already to have.

Mantegna Cartoons (Display)

Mr. Wyatt: asked the Minister of Works whether he has yet agreed with the Surveyor of the King's Pictures on a better method of displaying the Mantegna cartoons at Hampton Court.

Mr. Key: No, Sir. Various suggestions are being explored, but it may be another month or so before a decision can be reached.

Mr. Wyatt: Is my right hon. Friend aware that his Department are perpetrating something in the nature of a swindle by charging 3d. for admission to see some cartoons which cannot be seen because of the bad lighting?

Mr. Key: I agree that the lighting is not as good as it should be and experiments are being carried out to improve it.

Building Work (Exemption Limits)

Mr. Chetwynd: asked the Minister of Works what action he proposes to take in connection with the proposed reduction in the exemption limit for building licensing.

Mr. Key: I have made an order under Defence Regulation 56A reducing from £1,000 to £500 the amount which may be spent without licence on individual properties in the categories of industrial and agricultural building in the 12 months from 1st July, 1949 to 30th June, 1950; the corresponding amount for office buildings, storage buildings and educational buildings is reduced from £1,000 to £100. These new limits will take effect from 1st February next so that work started under the previous limit but costing more than the new limit will not require a licence if it is finished before 1st February; otherwise an application for a licence should be made in good time before that date.
The order makes no change in the £100 exemption limit for the remaining classes of building.

Captain Crookshank: Can the right hon. Gentleman say what the estimated reduction of capital investment will be as a result of this?

Mr. Key: No, I cannot, but what it does do is to bring this business more under control so that we can keep it in relation to the other things for which we have to give licences.

Sir W. Smithers: Can the Minister do anything about issuing better licences and better priorities for homes for the people? Is the right hon. Gentleman aware that in the Orpington area we were allowed to build only 400 houses last year and we could have built over 1,000? Will the right hon. Gentleman set about the Minister of Health?

Food Office, West Lothian

Mr. Mathers: asked the Minister of Works why his promise, made to Bathgate Town Council, that a start would be made in November with the provision of a new food office for West Lothian, has not been carried out; whether he is aware that the inconvenience involved is more than ever resented; and what he now proposes to do to remedy the position.

Mr. Key: The delay in starting this project is due to the review of the building programme necessitated by the cuts in capital investment. It has now been decided that the project will go on and tenders for the work are in course of examination.

Mr. Mathers: Does that mean that the project will be completed within the time previously indicated?

Mr. Key: I am afraid I could not give that assurance, but I hope so.

Oral Answers to Questions — PETROL SUPPLIES

Foreign and Colonial Services (Leave)

Lieut.-Colonel Sir Thomas Moore: asked the Minister of Fuel and Power what allowance of petrol is granted to officers of the Foreign and Colonial Services respectively, while on leave in this country.

The Minister of Fuel and Power (Mr. Gaitskell): A British civilian on leave from abroad would receive, in addition to the standard ration for his own car, a special allowance sufficient to provide for 150 miles of motoring.

Sir T. Moore: How does that correspond with the petrol allowance given to officers of the Fighting Services on leave?

Mr. Gaitskell: The allowances for Service personnel are slightly larger than those for civilians.

Commercial Travellers

Mr. A. R. W. Low: asked the Minister of Fuel and Power whether he is aware that in many areas the maximum supplementary allowance of petrol allotted to commercial travellers is insufficient; and whether he will now immediately review his regulations to enable a higher maximum to be given in cases where it can be justified.

Mr. Gaitskell: The maximum allowances for commercial travellers were increased last February after consultation with the associations representing commercial travellers and the Association of British Chambers of Commerce. I regret that in present circumstances I could not agree to any revision that would result in a further increase of petrol consumption.

Mr. Low: Is the right hon. Gentleman not aware that the imposition of a rigid maximum such as exists today results on occasions in firms having to appoint an extra commercial traveller to cover a particular area, and does not this rigid maximum in actual fact result in limiting the amount of work that any one man can do in a day or in a given period? Is that not most undesirable in our present situation?

Mr. Gaitskell: We considered very carefully, in consultation with representatives of the commercial travellers, whether we could not have another system which, I agree, might be more equitable than the present one, but we all came to the same conclusion that it was quite impracticable.

Brigadier Prior-Palmer: Will the Minister say why it is not possible to judge each case on its merits and to allocate an extra ration of petrol to a commercial traveller who has a wider area to cover?

Mr. Gaitskell: It really is quite impossible to administer petrol rationing on the basis of every case being treated on its merits without any rules whatever.

Sir T. Moore: Is it not recognised, both in the Treasury and in the other Departments concerned, that a motor car to a commercial traveller is a tool of the trade; and did not the right hon. Gentleman himself promise me many months ago that that particular aspect of the subject would be reconsidered with a view to coming to a general decision favourable to the commercial travellers?

Mr. Gaitskell: It was reconsidered, as I have just explained, but unfortunately we came to the conclusion that a change was impracticable.

Baxtrol

Lieut.-Colonel Lipton: asked the Minister of Fuel and Power whether he proposes to control the manufacture and sale of Baxtrol, in view of the fact that this substance has to be mixed with petrol if it is to be effective.

Mr. Gaitskell: No, Sir; not for the present.

Lieut.-Colonel Lipton: Subject to the needs of industrial users and speedways


being satisfied, is it necessary to ban supplies of acetone and methanol from the makers of Baxtrol?

Mr. Gaitskell: No, Sir. As far as I know, there is no intention of banning supplies.

Hire Cars, Edinburgh

Lord John Hope: asked the Minister of Fuel and Power whether he will review the conditions on which petrol is allocated to owners of self-drive hire cars in Edinburgh.

Mr. Gaitskell: The conditions on which petrol is allocated to owners of hire cars, whether chauffeur-driven or self-drive, are similar throughout the country. The need for additional hire cars in any particular place is assessed in the light of all other transport facilities in the area, including existing hire-car services.
I have recently received a report on the position in Edinburgh and am satisfied that the number of self-drive hire cars at present available in the city is adequate. But I propose to arrange for a further review before the next tourist season.

Lord John Hope: How can the Minister say that—this happened a week after I had received a letter from his hon. Friend in the terms in which he has just replied—when the Scottish Tourist Board announced that, after carrying out a very careful survey, they realised that only 50 per cent. of the demand had been able to be met during last summer? The right hon. Gentleman really must get this thing straight.

Mr. Gaitskell: I cannot accept that the opinion of the hire-car operators themselves is necessarily final in this matter.

Lord John Hope: No, this was the Scottish Tourist Board.

Mr. William Shepherd: Is the Minister able to say whether he pursued the normal course in this matter or an abnormal course? Did he consult only the police before he came to this decision?

Mr. Gaitskell: I consulted my own officers, who took what advice they thought was necessary, including, no doubt, that of the police.

Mr. Shepherd: But did they consult any bodies other than the police?

Mr. Gaitskell: I do not think so. They have not themselves received any complaints from tourists that they were unable to obtain these facilities.

Sir William Darling: Would the Minister consider consulting the Chamber of Commerce of the City of Edinburgh, which is well informed on these matters?

Mr. Gaitskell: I am perfectly prepared to consider advice from anybody.

Lord John Hope: Surely the Minister does not confuse the Scottish Tourist Board with the owner-drivers? Why did he say that he would not take the opinion of the owner-drivers as final? I did not ask him to do so.

Mr. Gaitskell: Because, according to my information, the Scottish Tourist Board received their information from the hire-car operators.

Lord John Hope: I give notice, Mr. Speaker, that had I been at all lucky in the ballot in the last three weeks, I would have raised this matter on the Adjournment.

Commercial Petrol (Regulations)

Sir John Mellor: asked the Minister of Fuel and Power what further amendment of his regulations he proposes to make as a result of the discovery in Lancashire of a consignment of white petrol, which reacted to police tests in the same way as commercial spirit.

Mr. Gaitskell: None, Sir. Neither the red dye nor the ingredient prescribed for commercial petrol under the Motor Spirit Regulations were found in the consignment of petrol referred to in the Question.

Sir J. Mellor: Why should law-abiding persons be pounced on by the Minister's officials and their pumps be sealed merely because the right hon. Gentleman cannot get the chemical basis of his tests right and reliable?

Mr. Gaitskell: It is not a question of the chemical basis of the tests being wrong. This is a question of the initial tests by the police and not of the analysis.

Mr. Boyd-Carpenter: Is it proposed to compensate the perfectly innocent garage proprietors whose business was stopped for three days?

Mr. Gaitskell: No, Sir.

Sir J. Mellor: Are further supplies of this same petrol being distributed throughout the country?

Mr. Gaitskell: We are going into the exact reason why this particular consignment of petrol reacted in the way it did to the police test. I cannot make a further statement at present.

Oral Answers to Questions — FUEL AND POWER

Gas Industry (Training)

Mr. Albu: asked the Minister of Fuel and Power whether he has yet agreed with the Gas Council a general programme of training and education in accordance with Section 4 of the Gas Act, 1948.

Mr. Gaitskell: No, Sir.

Mr. Albu: Is my right hon. Friend satisfied with the progress being made by the area boards in the development of this scheme?

Mr. Gaitskell: The Gas Council, I understand, have a committee considering education and training. I do not think it is reasonable to expect them to produce a complete scheme so soon after vesting day.

Domestic Coal Ration

Mr. Lipson: asked the Minister of Fuel and Power if he will give an estimate of the saving in manpower and expenditure which would result if the rationing of domestic coal were ended; and if he is now able to agree to do this.

Mr. Gaitskell: About 5,000 and £1¼ million respectively. The reply to the second part of the Question is, No, Sir.

Mr. Lipson: Can my right hon. Friend say, if he cannot abolish domestic coal rationing now, whether there is any hope that he will be able to do so in the near future?

Mr. Gaitskell: Unfortunately, it would cost us some £20 million worth of foreign exchange if we were to supply the coal that would be required as a result of

abolishing rationing, and I would not care to prophesy when coal output will have reached the point at which we shall be able to abolish rationing.

Kirkcaldy Corporation (Gas Order)

The following Question stood upon the Order Paper in the name of Mr. HENDERSON STEWART:

33. To ask the Minister of Fuel and Power why he refused the request of the County Council of Fife for a copy of the report of the recent inquiry into the Gas Order promoted by Kirkcaldy Corporation; and if, in view of the direct interest of the Fife County Council in this matter, he will cause a copy of the report to be sent to the council forthwith.

Mr. Gallacher: On a point of Order, Mr. Speaker. Might I say that the Fife County Council approached the hon. Member for East Fife (Mr. Stewart) and the hon. Member for West Fife, and as the hon. Member for East Fife is not here, could you not stretch a point and allow the Question to be answered?

Mr. Speaker: It can be asked only by the hon. Member who put it down.

Oral Answers to Questions — BRITISH ELECTRICITY AUTHORITY (REPORT)

Mr. Erroll: asked the Minister of Fuel and Power when the report and accounts of the British Electricity Authority will be published.

Mr. Gaitskell: I have now received the report and accounts and expect that they will be published about the middle of January.

Mr. Erroll: Is there any reason for such a prolonged delay now that the Bradford by-election is over?

Mr. Gaitskell: There were considerable difficulties during the first year, both on the accounts side and as regards the report, which I do not think will recur in future.

Oral Answers to Questions — LEGAL AID (POOR PERSONS)

Lieut.-Colone I Lipton: asked the Attorney-General whether, pending the introduction of the Legal Aid Scheme, he will recommend that the present weekly


maximum income of £4 for applicants under the Poor Persons Rules be increased.

The Attorney-General (Sir Hartley Shawcross): No, Sir. That part, of the Legal Aid and Advice Act which has not been deferred deals with litigation covered at present by the Poor Persons Rules and will be brought into force at about the date previously planned, namely, July, 1950. If the income limits under the existing system were increased as an interim measure, the Law Society could not both reorganise their present arrangements for that purpose and plan for the new scheme so as to be able to administer it by that date.

Lieut.-Colonel Lipton: Does the reply of my right hon. and learned Friend mean that we are now definitely assured that the first part of the Legal Aid Scheme will be definitely introduced in or about July of next year?

The Attorney-General: Yes. We hope that that part of the scheme which deals with litigation in the High Court will be introduced about that date; and that is the part of the scheme which covers the existing poor persons procedure.

Oral Answers to Questions — FOOD SUPPLIES

Uruguayan Meat (Price)

Brigadier Rayner: asked the Minister of Food what increase in the price of meat from Uruguay has been agreed.

The Parliamentary Secretary to the Ministry of Food (Dr. Edith Summer-skill): The new meat contract with Uruguay has not yet been signed. Until it is, I am unable to make any announcement about prices.

South African Canned Pilchards

Mr. Douglas Marshall: asked the Minister of Food what is the estimated quantity of canned pilchards which will be imported from South Africa in the forthcoming year.

Dr. Summerskill: About 2,500 tons have been offered, but no contract has yet been made.

Mr. Marshall: May I ask the right hon. Lady, when considering these contracts,

if she will always take into consideration the importance of Cornish pilchards, and see to it that these imports do not hurt this industry?

Dr. Summerskill: Certainly I can assure the hon. Gentleman that we take that into consideration, but he must also remember that the Cornish pilchard industry only produces 1,500 tons of pilchards per year while the total consumption is 12,000 tons a year.

Subsidies

Sir I. Fraser: asked the Minister of Food to what extent the total paid in subsidies on bacon, meat and tea is to be increased following the increase in the weekly ration of those commodities.

Dr. Summerskill: The total extra cost in the year 1949–50 is estimated at £5.4 million. Of this amount £2.6 million was included in the estimate given on 1st November in reply to my hon. and gallant Friend the Member for Central Hull (Captain Hewitson).

Sir I. Fraser: Does the answer mean that the subsidy will meet the cost or that the consumer will meet it?

Dr. Summerskill: The subsidy will meet the cost.

Sir I. Fraser: Is that consistent with the statement of the Chancellor about limitations on the subsidy?

Dr. Summerskill: I would remind the hon. Gentleman that in my answer I referred to the answer given to my hon. and gallant Friend the Member for Central Hull, and then the subsidy was at £462 million.

Captain Crookshank: Does that mean that if ever the ration is increased, we have to consider an increase in the subsidy, and that therefore the extra payment comes from the taxpayers?

Dr. Summerskill: No, the right hon. and gallant Member must realise that these subsidies fluctuate from month to month and that the prices fluctuate. The Chancellor of the Exchequer gave the undertaking that he hopes to keep it at £465 million and that is why I have told the hon. Member what the subsidy is now.

Mr. Harrison: Will my right hon. Friend consider increasing the national expenditure on subsidies by bringing forward by a fortnight the increased allocation of sugar, so that we can have more for Christmas?

Office, Morecambe

Sir. I. Fraser: asked the Minister of Food if he will give instructions that the food office in Morecambe is to be kept open for the use of householders and 932 caterers.

Dr. Summerskill: Owing to accommodation difficulties, the concentration in the Morecambe area will be confined to tie transfer of the administrative control of the food office to the Birkenhead district office. The Morecambe office will continue to be available for the use of consumers and traders until such time as suitable premises for the district office become available.

Sir I. Fraser: Birkenhead is 50 miles away; is that not a mistake?

Dr. Summerskill: Perhaps the hon. Member is not quite clear on this point. Only the administrative control will be conducted from Birkenhead. Finally, the district office, in which I think the hon. Member is interested, will be at Lancaster.

Fruit

Professor Savory: asked the Minister of Food whether he is aware that there are in South Antrim and in County Armagh orchards lying thick with apples, including tons of Bramleys, for which there is no market owing to foreign competition, and that there are also eating pears, superior to any obtained abroad, which are rotting in the orchards owing to the quantities coming in from Italy and the Netherlands; and what steps he proposes to take to prevent the Northern Ireland fruit grower from being completely deprived of his market owing to foreign competition.

Dr. Summerskill: The apple crop in Northern Ireland is almost entirely composed of cookers and I cannot agree that their marketing has suffered in any way from the distribution last October of about half a pound per head of imported eating apples. And as for pears, under one-tenth of a pound per head are grown in Northern Ireland, and it is only those

of poor, quality that have failed to find a market.

Professor Savory: May I ask the right hon. Lady whether, before importing these foreign apples and pears, she consulted the Minister of Agriculture for Northern Ireland, who would have given her very accurate information?

Dr. Summerskill: If the hon. Gentleman consults that Department, he will find that they agree with everything I have said. Surely the hon. Gentleman would not deny his constituents half a pound of eating apples?

Professor Savory: As this country is so delighted to receive millions of our eggs, as the Home Secretary stated on 1st December, will not the right hon. Lady give kind consideration to our apples and pears?

Sir W. Smithers: asked the Minister of Food if he has considered the particulars which have been sent to him concerning the difficulties being experienced by a market gardener in Kent in marketing his fruit crop; and what action does he propose to take.

Dr. Summerskill: This complaint is similar to the one in the hon. Member's Question of 31st October and I must refer him to the reply which I gave him on that occasion.

Sir W. Smithers: I cannot let the right hon. Lady get away with it like that. Is not she aware that Government interference, by bulk purchase and State control in the markets, is creating enormous losses to growers and farmers, and enormous losses to the public, and keeping food short—I believe on purpose?

Dr. Summerskill: I think the hon. Member is becoming repetitive.

Sir W. Smithers: On a point of Order. Why should I be accused of having the hiccups?

Sweets (Overseas Visitors)

Sir Hugh Lucas-Tooth: asked the Minister of Food under what regulation visitors from overseas are permitted to apply for coupons for an extra 2 lb. of sweets over and above the normal ration; how many such coupons were issued during the year ending on the latest convenient date; and whether all persons


of other than British nationality may obtain such coupons notwithstanding that they may be permanently resident in this country.

Dr. Summerskill: This is an administrative arrangement which was introduced on 14th August, 1949, and I am afraid that no figures are available to show the number of coupons issued. The extra sweets are available only to overseas visitors staying temporarily in this country.

Sir H. Lucas-Tooth: Will the right hon. Lady say how long "temporary" means for this purpose, and how the scheme is brought to the notice of visitors?

Dr. Summerskill: The length of time depends on how long they keep their temporary ration books.

Commonwealth Sugar Production

Mr. De la Bére: asked the Minister of Food what steps he is taking to encourage the Empire sugar producers to increase production, with special regard to the small sugar ration at present in force in this country, the impracticability of increasing supplies from dollar sources and the talks being held in London during December, 1949, between this country and sugar producers throughout the world.

Dr. Summerskill: The greatest incentive for Commonwealth sugar producers to expand their production was provided in 1948, when for a period of five years we undertook to find a market within the Commonwealth for all the sugar which they could produce for export. The main object of the discussions now being held in London is to make arrangements for a term of years beginning in 1953.

Mr. De la Bére: May I ask whether the West Indian delegates have really had a square deal? Cannot we have an assurance that we shall have not only the sugar they produce today but their increased production, so as to make sure that people in this country get their proper ration? Why not do something for the Empire? I want something done for the Empire.

Mr. Driberg: Quite seriously, can my right hon. Friend say whether the keen

apprehensions expressed by the Jamaican representatives were justified? Is it the case that we are drastically cutting down our guarantee to the West Indies in order to take half a million tons of sugar from the dollar area, and if so, why?

Dr. Summerskill: I think my hon. Friend knows that negotiations are still proceeding, and it would not be proper for me to make any comment on them at this stage.

Mr. Oliver Stanley: During the course of those negotiations, which at the present moment appear to be in danger, will the right hon. Lady have particular regard to what was said by the Secretary of State for the Colonies during the Colonial Debate in July; a statement which was taken as representing the view of the Government and which gave great satisfaction to the West Indies?

Dr. Summerskill: Yes, Sir. We always consider the view of the Secretary of State for the Colonies.

Mr. F. Noel-Baker: Can my right hon. Friend say what steps she is taking to ensure that when this sugar reaches the consumer in this country he gets sugar for his money and not political propaganda?

Mr. Driberg: Since the Jamaican representatives thought that the conference had reached such a crisis that they almost had to walk out of it and had to issue these statements, cannot my right hon. Friend say anything in reply to the very full statements which they have made?

Dr. Summerskill: No, Sir. not at this stage.

Oral Answers to Questions — PRIVILEGE (COMPLAINT)

Mr. Wyatt: asked the Lord President of the Council whether the Government propose to find time to debate the Motion standing in the name of the hon. Member for Aston before 16th December.

[That the matter of the complaint of the hon. Member for Ashford, referred to in the statement of Mr. Speaker on Monday, 5th December, be referred to the Committee of Privileges.]

The Lord President of the Council (Mr. Herbert Morrison): I fear that time is not available for the consideration of tny hon. Friend's Motion

Mr. Wyatt: Is my right hon. Friend aware that Mr. Powell runs a lobbying agency in this House on the American principle and that his activities ought to be investigated, particularly the facilities he gets as secretary of the Inter-Parliamentary Union? Mr. Speaker said that it would be quite open for any hon. Member to put down a Motion, but there is no point in doing that unless it is debated. Is my right hon. Friend also aware that there is considerable anxiety in the House that this matter is, apparently, being allowed to go by default?

Mr. Morrison: I appreciate the point my hon. Friend raises, but the fact is that between now and Friday I am sure there is not time to deal with the matter and the Motion. Moreover, it would be for the Committee of Privileges to deal with it and to report to the House; and taking all this into account, I am afraid it is physically impossible.

Mr. Mathers: Is not this matter being erected into something of importance, whereas it is merely a question of tittle-tattle—[HON. MEMBERS: "No."]—and is it not regrettable that an hon. Member on this side of the House should be doing the dirty work for someone else?

Hon. Members: Oh.

Lord John Hope: Without prejudice to the case, surely the right way to look at it is in terms of harm being done to Mr. Powell until this thing is decided one way or the other? After all, grave accusations have been made against him, and it seems to me to be not fair to any citizen to have these charges bandied about, especially in the House of Commons, without any possibility of a reply.

Mr. Morrison: In the ordinary way what would have happened would have been for the matter to be raised as a matter of Privilege at the proper time. I am not blaming anyone, but Mr. Speaker did draw attention to the fact that it was not raised in time. The question for me is the provision of time for a special Motion, and I just have not got time.

Captain Crookshank: While it is quite true that the question of Privilege fell because it was not raised at the right moment, is it not rather unfortunate that time should be found this week for all

sorts of Motions which are less urgent, and was it not implicit in Mr. Speaker's Ruling and is it not true that time could be found for this matter while this particular slur—if I may use the word—rests upon a gentleman, who is not a Member of this House, who is accused and whose case ought to be investigated by someone?

Mr. Morrison: All the matters which are being dealt with this week are matters of definite public interest, and that has to be kept in mind. If I may say so, with respect to you, Sir, quite properly, when faced with the question of the other alternative hon. Members had open to them, you pointed out that a Motion could be put down, but that in no way prejudiced the issue of whether time would be available to debate the Motion.

Mr. Benn Levy: On a point of Order. May I ask for your guidance, Mr. Speaker, on a general question arising out of this Question, but without prejudice to the case? Do the Rules of Order make any distinction between ordinary lobbying by constituents and others for the purposes of ensuring that their point of view is duly considered by hon. Members—of which, of course, no one disapproves—and the activities of people who, for monetary gain, make a practice of contacting Members of Parliament with a view to influencing their actions, and who are employed and paid for that purpose by outside vested interests?

Mr. Speaker: I do not think I can give a definite Ruling on that. That is a matter which I think the House should decide for itself.

Sir I. Fraser: While recognising that there is a point as to the use of particular parts of this House, Committee corridors and so on, can it not be made clear that this gentleman is not accused of any crime, or even of bad behaviour, and that it is a very real service to hon. Members in all parts of this House to have technical help in bringing forward any proper case to present to Parliament?

Mr. Gallacher: In view of the very keen interest taken in this matter and the fact that the Minister says there is no time between now and Friday to discuss it, is it not possible, on a special matter of this kind, for the House to work longer hours, as we are advising other people to work longer hours?

Mr. Morrison: I am interested to know that the hon. Member for West Fife (Mr. Gallacher) is advising other people to work longer hours.

Captain John Crowder: May I ask, Sir, whether you have had any report from the Inter-Parliamentary Union, as I understood you to say that the matter is now in their hands?

Mr. Speaker: I understand it is coming today and I propose to say something tomorrow.

Mr. Austin: May I ask for your advice and guidance, Sir, further to the advice which you tendered to the House last week and which was followed by my hon. Friend the Member for Aston (Mr. Wyatt) putting down the Motion? Is it not the case that such a Motion takes precedence over all other business in that respect?

Mr. Speaker: No. This is an ordinary Private Member's Motion and it has no precedence. I do not know whether we could save time over this matter, because, after all, this Session ends on Friday but another one presumably begins on 24th January, and it will be open to any Member to put down the same Motion again after that date.

Mr. Wyatt: Is my right hpn. Friend aware that there is also another reason why it is important that this matter should be investigated, namely, that there should seem to be no bar to a proper and impartial investigation. It has been said that Mr. Powell is a Freemason and that because he is a Freemason other persons are interested in seeing that this matter is not properly investigated.

Mr. Boyd-Carpenter: In view of what his hon. Friend has now twice said in this House, will not the Lord President reconsider his decision and, in fairness to Mr. Powell, allow this matter to be discussed, even if it involves suspending the Rule on one night this week?

Mr. Morrison: I am afraid not, because there are two schools of thought in the House. One is that Mr. Powell has done something wrong and the other is that he is innocent. I am not pronouncing judgment on that, but in case there should be any misunderstanding of what my hon. Friend the Member for Aston (Mr. Wyatt) said, may I say that I am not

a Freemason. The trouble is that even if time could be found for discussion of the Motion by suspending the Rule, the matter would not stop there. It would have to go to the Committee of Privileges, which would have to take some little time over it and which would report, and if the House wanted to debate that report, it is clear that those stages could not be completed by the end of the Session.

Captain Crookshank: Why does the right hon. Gentleman keep saying that the matter would have to go to the Committee of Privileges? There is no reason for it having to do anything of the sort.

Mr. Morrison: The right hon. and gallant Gentleman is getting rather heated, but has he read the Motion? It terminates with the words
be referred to the Committee of Privileges.

Captain Crookshank: It does not follow that the Motion need be accepted. The matter could be ventilated in the House and the general opinion of the House taken. It might be that after that the House would negative the Motion but come to a general conclusion as to what ought to be done.

Mr. Morrison: In the circumstances of this case, that would not do either. I nearly got into trouble fairly recently because I thought that a case was pretty obvious and that the House could dispose of it summarily. I was met with the argument that it ought to go to the Committee of Privileges—and that was raised from the Opposition Front Bench—and the House so referred it. Here is a Motion which definitely proposes that the matter should go to the Committee of Privileges. Therefore, I think that the right hon. and gallant Gentleman is quite wrong.

Sir T. Moore: In view of the biased and in my opinion unfair statement made by the hon. Member for Eton and Slough (Mr. Levy) in regard to this case, might I point out for the benefit of the House that I was concerned in this matter, and that I did ask Mr. Powell, as I could not be present at that Committee myself, to see that those in opposition to the Bill should co-ordinate their efforts and make known their opposition in the Committee.

Mr. Levy: Is my right hon. Friend aware that in my previous question I was at great pains to put it in general terms, and also to specify that I was putting it without prejudice to this case. As both the interests of Mr. Powell and the interests of this House are involved, and as you, Mr. Speaker, have also reminded us that there is no necessary presumption that there is not to be another Session, might I ask my right hon. Friend whether, since he has advanced as his only reason for opposing this Motion the consideration of time, he will tell us if he will sympathetically consider allowing time for this Motion during the next Session?

Mr. Morrison: Certainly, I will give perfectly fair and open-minded consideration to it in the next Session of Parliament.

Mr. Henry Strauss: Does not the right hon. Gentleman realise that, although he has quite accurately stated that there are two possible views on the point he mentioned, there is one point on which I think the House is unanimous, which is that no citizen should be condemned unheard? Does the right hon. Gentleman not realise that if no facilities are given to debate the Motion of the hon. Member for Aston (Mr. Wyatt), Mr. Powell will necessarily lie under some suspicion for a long time?

Mr. Morrison: I have said nothing condemnatory about the matter at all. I have stated that there has been more than one view expressed about it. I do not think that there is really all that injustice being done.

Oral Answers to Questions — GERMANY (SYNTHETIC RUBBER PLANTS)

Mr. Walter Fletcher: asked the Secretary of State for Foreign Affairs why, in view of his negotiations with the United States of America for the reduction of their synthetic rubber production, he agreed to the starting up of synthetic rubber plants in Germany; and at what annual rate of production from 1950 onwards.

The Under-Secretary of State for Foreign Affairs (Mr. Mayhew): The manufacture in Germany of synthetic rubber is forbidden under Article V of

the Prohibited and Limited Industries Agreement of April, 1949; this prohibition was not modified by the recent Agreement with the German Federal Chancellor.

Mr. Fletcher: Are we to take it from the fact that this dismantling has been stopped in these factories, that there will be any change of policy in regard to the manufacture of synthetic rubber?

Mr. Mayhew: Synthetic rubber will not be manufactured, even though the factories have not been dismantled.

Oral Answers to Questions — NORTH ATLANTIC TREATY

Mr. Platts-Mills: asked the Secretary of State for Foreign Affairs if he will give an undertaking, in connection with the agreement to be negotiated under the Atlantic Pact, that no commitment will be entered into by His Majesty's Government outside the framework of the United Nations organisation.

Mr. Mayhew: Any agreements negotiated under the North Atlantic Treaty will of course be governed by the provisions of the Treaty itself, Article 7 of which states that:
This Treaty does not affect, and shall not be interpreted as affecting, in any way the rights and obligations under the Charter of the Parties which are members of the United Nations, or the primary responsibility of the Security Council for the maintenance of international peace and security.

Mr. Platts-Mills: We all know that the pact is not within sight of the spirit of the United Nations organisation. Will my hon. Friend take great pains to see that these bilateral treaties do come within the spirit of the United Nations?

Mr. Mayhew: Since the assumption is incorrect, that action would not be appropriate.

Mr. Platts-Mills: asked the Secretary of State for Foreign Affairs if he will give an undertaking, in connection with the agreement to be negotiated under the Atlantic Pact, that he will not surrender to any other Power or body the right to declare war on behalf of Great Britain and will not enter into any commitment whereby Great Britain can become automatically involved in war.

Mr. Mayhew: It is the prerogative of the Crown to declare war, and I can assure the hon. Member that His Majesty's Government will not surrender this right to any other Power or body. By Article 5 of the North Atlantic Treaty the United Kingdom is committed, in the event of an armed attack on any of the parties in Europe or North America, to take
such action as it deems necessary, including the use of armed force, to restore and maintain the security of the North Atlantic area.
Any supplementary agreements or arrangements which may be negotiated under the treaty Will not increase or diminish this commitment.

Mr. Platts-Mills: We all know that the terms of the first of these bilateral treaties are now being negotiated between France and the United States of America. Can we have an assurance that the terms that we shall agree to, will not be more degrading and humiliating than those now being imposed upon France?

Oral Answers to Questions — IRAQ (TRANSIT VISAS)

Mr. W. Fletcher: asked the Secretary of State for Foreign Affairs if he is aware that holders of British passports passing through Iraq in transit are subjected to delay and inconvenience and refusal of transit visa on the grounds of their religion; and what action he proposes to take.

Mr. Mayhew: The attention of my right hon. Friend has not so far been drawn to any case in which a transit visa has been refused on the ground of the applicant's religion. On these and other grounds certain visa applications have, however, been referred to the Iraqi authorities in Bagdad for decision, but this practice of referring applications to the central government is common to many States, and no action is at present contemplated by His Majesty's Government.

Mr. Fletcher: Is it not a fact that, as in the case which I referred to the Secretary of State, great inconvenience and delay are caused, on grounds of religion to the holders of British passports, and that they are subjected to humiliation and have to remain locked up in planes? Will the hon. Gentleman see that, when

they are proceeding on their lawful occasions, they are not subjected to these discriminatory practices on the grounds of religion?

Mr. Mayhew: Where there are delays and inconveniences—and they do exist—I shall be glad to take up individual cases, but I do not accept all the facts which the hon. Member has stated. We have no grounds for intervention at present.

Mr. S. Silverman: Is my hon. Friend not aware that, while it is true that on special reference to headquarters, permission has ultimately been obtained in an individual case, the general rule in Iraq at the moment is not to permit persons of the Jewish faith to have even transit facilities over Iraq, even when they are British citizens or the citizens of any other country? Is it not on the basis of that general discrimination that the Foreign Secretary ought to take some action or make some representation?

Mr. Mayhew: No. I can only say that I am not aware of any case in which a visa has been refused. I am aware that there have been delays, and I shall be glad to take up individual cases.

Mr. Fletcher: The hon. Gentleman says that he will be glad to take up individual cases. Does he not remember the case which I referred to him of the son of a High Court judge in this country, a man with an excellent Service record, who was subjected to a great deal of expense in sending telegrams to the chief of police in Bagdad, and that he has refused to take up this man's case and is completely supine in taking up the case of a British subject?

Mr. Mayhew: I cannot accept that. I understand that a visa was not refused. There may have been delay, but there would have been less delay if we had been asked to interfere when the dispute started.

Oral Answers to Questions — BRITISH EMBASSY, MADRID

Mr. Francis Noel-Baker: asked the Secretary of State for Foreign Affairs how many persons are employed on the staff of the British Embassy at Madrid; and what are their functions.

Mr. Mayhew: The British staff numbers 47. In addition, there are 75 locally engaged employees, most of whom are Spanish nationals. In addition to the usual political staff, the Embassy contains Commercial, Consular and Information Sections. Their functions are those normally assigned to the staffs of His Majesty's Missions at foreign capitals.

Mr. Noel-Baker: Can my hon. Friend tell me whether His Majesty's Government still consider themselves bound by the Resolution of the United Nations not to increase the staff by re-appointing the Ambassador; and secondly what changes in the composition or methods of the present Spanish Government have taken place since that Resolution was passed, or since my right hon. Friend said in this House that he detested the Franco regime?

Mr. Mayhew: The answer to the first part of the question is, Yes. Regarding the second part, I am aware of no such changes.

Vice-Admiral Taylor: Can the hon. Gentleman say when the Government will end the ridiculous position which they have taken up in sending an Ambassador to Russia and not one to Madrid?

Mr. Speaker: The question only asked how many men were employed. There is nothing about sending an Ambassador.

Mr. Anthony Nutting: Can the hon. Gentleman tell the House whether the Spanish Ministry for Foreign Affairs still insist on vetting appointments, even of junior members, to the staff of the Embassy, as they once did?

Mr. Mayhew: I am not aware of that.

Mr. Erroll: Are any members of the staff really Members of Parliament in disguise?

Oral Answers to Questions — U.S.S.R. AND EASTERN EUROPE (BRITISH SUBJECTS)

Mr. J. Langford-Holt: asked the Secretary of State for Foreign Affairs how many diplomatic protests have been made to the Union of Soviet Socialist Republics and Governments of Eastern European States as a result of improper treatment or imprisonment of British subjects since January, 1946.

Mr. Mayhew: It is difficult to establish how many of the numerous communications made to these Governments since this date fall within the category described. I regret that the necessary research would involve an unjustifiable expenditure of labour.

Mr. Langford-Holt: Would not the hon. Gentleman agree that these protests do run into many hundreds and is there no appropriate action between the issue of those scraps of paper and armed force which the Foreign Office can take in order to justify the protests?

Mr. Mayhew: I cannot mention any figure. If the hon. Member has any helpful suggestion to make, I will gladly consider it.

Vice-Admiral Taylor: Could not the Government withdraw our Ambassador from Russia?

Oral Answers to Questions — HOUSE OF COMMONS CATERING

Herrings

Mr. W. Fletcher: asked the hon. Member for West Walthamstow, as Chairman of the Kitchen Committee, why, when grilled herrings appear on the menu, stewed or steamed herrings with sauce are served instead.

Mr. McEntee: When grilled herrings appear on the menu they are grilled, and not stewed or steamed as stated in the Question. An average of 150 grilled herrings are sold daily, but if the hon. Member wishes to have herrings separately grilled to his order, he can have them, provided he is willing to wait 10 or 12 minutes for service.

Mr. Fletcher: Is not the hon. Gentleman aware that appearances must be very deceptive, because what appears on the menu as a grilled herring when served to hon. Members would be rejected in any working men's canteen? It is flabby and at the same time hard, and is covered with one of those charity sauces that cover a multitude of sins.

Mr. McEntee: During all the time I have been Chairman of the Kitchen Committee, this is the first complaint I have had about grilled herrings, which I think is a sufficient answer.

Mrs. Leah Manning: May I ask my
hon. Friend why, when they serve grilled or steamed herrings, they take out the roes and serve them separately as a savory? They are getting their money twice over.

Mr. McEntee: I must have notice of that question.

Mr. Emrys Hughes: May I ask my hon. Friend whether the reason the hon. Member for Bury (Mr. W. Fletcher) cannot get red herrings is because they have been cornered and kept in cold storage at the Tory headquarters ready for the next Election?

Sausages (Price)

Sir W. Smithers: asked the hon. Member for West Walthamstow, as Chairman of the Kitchen Committee, on what basis hon. Members are charged 5d. for a small sausage in the Members' cafeteria.

Mr. McEntee: Sausages sold in the Members' tea room weigh six to the pound. The gross profit on one sausage is 2⅓ d. approximately. From this gross profit must be deducted the cost of cooking and serving, transporting to tea room, the use of a plate, knife, fork and condiment containers, and the provision of sauces, mustard, pepper, salt and cooking fat. In addition, there is the cost of book entries for buying, selling, accounting, auditing and certifying. I have not the staff to work out the decimal net profit, but I estimate it to be under 1d.

Sir W. Smithers: Is the hon. Gentleman aware that when I cut one of the sausages the other day it turned round and barked at me? May I ask him whether this enormous expense and the losses incurred by the Kitchen Committee are due to the fact that they have to take out a dog licence for every sausage?

Mr. McEntee: I am not surprised that the sausage barked.

Mr. Wyatt: In view of the very heavy overheads in supplying the sausage, would my hon. Friend consider putting up the price?

Mr. McEntee: I will ask the Committee to consider that point at their next meeting.

POWER STATIONS, LONDON (STRIKE)

The Minister of Labour (Mr. Isaacs): I desire to make the following statement to the House: At eight o'clock this morning the manual workers at Brims-down Power Station came out on strike without notice and in breach of contract, and later today the manual workers at Taylors Lane and Littlebrook Stations similarly came out on strike. These strikes are unofficial. It is unnecessary to emphasise the detrimental effect of this action on the public welfare. The Government have decided that in order to maintain essential supplies, Service men should be used to keep the power stations going. We are confident the House will concur in this action which is designed to protect an essential public service.

Mr. Stanley: I can only say, on behalf of my hon. Friends and myself, that we entirely support the very rapid action which the Minister has taken to ensure essential services to the public. We hope that he will keep the House in touch with the developments and also that the men who have struck unofficially will see reason and return to work.

Mr. Gallacher: In view of the suddenness with which this has come upon us, could not the Minister tell us what the strike is about, or what attempts, if any, have been made to bring about an immediate settlement? Is it not most undesirable that whenever there are strikes nowadays, the first action is to call in the Army? That is an undesirable thing from the point of view of the working-class movement.

Sir I. Fraser: May we be told where the places are?

Mr. Isaacs: They are in the region of London—Brimsdown, Taylors Lane and Littlebrook.

Orders of the Day — PATENTS BILL [Lords]

Considered in Committee; reported without Amendment; read the Third time, and passed, without Amendment.

Orders of the Day — REGISTERED DESIGNS BILL [Lords]

Considered in Committee; reported without Amendment; read the Third time, and passed, without Amendment.

Orders of the Day — VEHICLES (EXCISE) BILL [Lords]

Considered in Committee; reported without Amendment; read the Third time, and passed, without Amendment.

Orders of the Day — ELECTION COMMISSIONERS BILL [Lords]

Considered in Committee; reported without Amendment; read the Third time, and passed, without Amendment.

Orders of the Day — AIR CORPORATIONS BILL [Lords]

Considered in Committee; reported without Amendment; read the Third time, and passed, without Amendment.

Orders of the Day — GAS STOCKHOLDERS (COMPENSATION)

3.40 p.m.

Colonel Clarke: I beg to move,
That this House views with deep concern the losses caused to creditors, co-partners and other holders of gas securities by the issue of British Gas Stock at a valuation that bears no relation to its true value at the date of issue, and urges on the Minister the necessity either to ensure the issue of a shorter-dated stock in satisfaction of compensation and making such stock convertible at par with Gas Stock already issued, or by some other method to rectify the present injustice.
I should like to emphasise that this Motion has been drawn with considerable care. I believe it is not over-critical or over-controversial, in spite of very much provocation to be both, because I am certain that we have here a real grievance. I believe, too, that this Motion is constructive, but not too dogmatic. If the suggestion which we put forward does not commend itself to the Minister, we suggest that he should put forward a better one himself. I would add that our recommendation for a fresh issue of stock of shorter date is based on the fact that before long it will be necessary for the Gas Council to make a fresh issue in order to raise more capital, and we cannot believe that, when that is done, the terms of that issue will be the same as those of the current issue.
I would also ask the Minister to note the order in which we have placed the injured persons in this Motion. We have put them in the order of creditors, co-partners and shareholders, and our reason for doing so is because we consider that that is really the order of priority in view of the injury they have sustained. Creditors have fared the worst, then come the co-partners and last but not least the shareholders.
I believe there may be many hon. Members present in the Chamber who have not had the opportunities that some of us have had of studying the Gas Act. It may therefore be to the advantage of everyone if I deal in rather careful detail at the beginning with the background behind this Motion. It will be well known to everyone that the gas industry was nationalised last year, with vesting day on 1st May, 1949, and that the owners were promised their compensation. That compensation, however, did


not mean cash. Actually, they had to take a loan which has been forced upon them in the form of an issue of British Gas Stock. Before the amount which the creditors, the stockholders, were to receive was decided, certain things had to be taken into account, depending, in the first place, on the value of the gas securities taken over—and I refer to gas securities in the sense to include both share capital and secured loans to creditors—and, secondly, the amount of gas stock which, in the opinion of the Treasury at the vesting date, equalled the value of those gas securities.
I want to say straight away that I think that the decision by the Treasury on the amount of gas stock that should be issued was a very fair one. Our complaint is not about that at all; the inequity and hardship come from a different source. I think it can be put down to faulty machinery and to faulty working of that machinery. It is known, of course, that the gas securities were valued on a Stock Exchange basis, and that was done with many other nationalised industries. I regret the method, but I am not going to deal with it here.
The relevant point is that some two-thirds of these securities could not receive a value on vesting day because they were unquoted on the Stock Exchange, and their value had to be ascertained by negotiations between the stockholders' representatives and the Treasury. Further, there were other securities which came under Clause 26 of the Act, which gives to companies which could prove diminution of income owing to the effects of the war, a right to some additional compensation.
Therefore, on the vesting day, some two-thirds of the securities could not be valued until these negotiations had taken place. In many cases, it has taken months to ascertain these values, and quite a number have not yet been ascertained. This delay, which could have been prevented by a postponement of the vesting day—and such a postponement would really have been in the interests of nationalisation and would have saved a good deal of the rush that took place—has been aggravated by three other factors. First, I understand, there are only two members of the Ministry's staff

who are authorised to negotiate. I believe that they are first-class men in their job, but it would be impossible even for a first-class man to do the work of 10.
The appeal tribunal, which was an essential part of the machinery, was set up only in July of this year, and the rules were not available until August. I think that was a poor show, and there was no sense of urgency in trying to get the thing through. There was a further delay, after settling the actual value of the stock, because the stock was issued only at intervals, sometimes of as much as six weeks, and sometimes, I believe, even longer than that, so that it was not on tap, as it were, as I think it should have been.
During all this delay, the value of Government securities was steadily falling, and British Gas Stock was falling with them. Therefore, the actual cash which the owner of gas securities could realise by selling his British Gas Stock, when allotted to him has been consistently falling since a day or two after vesting day. British Gas Stock fell as low as 82. At that time, the unfortunate receivers were getting it at a discount of 18 per cent. At 12 o'clock today, it was quoted on the Stock Exchange at 90 maximum. That was after a rise of half a point over the weekend, no doubt due to the result of the Australian election.
There has been a very considerable anomaly between the various shareholders. Let us take the cases of two men each of whom had £100 in gas securities. One of them had securities in a company which was valued on vesting day, and he was able to sell the stock which he received at par or slightly more. Today, he would have been able to sell it only at a discount of 10. That is very unfair, and has caused a very great deal of dissatisfaction.
To give some idea of the number of people involved I will quote a few figures regarding the amount of stock issued at par, or slightly below, between vesting day and about the second half of June, and the amount issued at a discount since then. About £95 million worth of stock was issued at or about par. Since then, a further £67,500,000 has been issued at a discount, and the greater part of that sum—£51 million—issued on 21st November, was issued at a value of only 88⅛. Therefore, it will be seen that a great


number of persons and institutions are involved.
I will illustrate my case by citing a few specific examples of hardship, and I shall deal first with creditors because, as I have already said, they are the hardest hit. I particularly want the Minister in his answer to give a considered reply in regard to them. The bulk of these creditors obtained loans for various reasons. Between 1945 and vesting day it was not easy for companies to raise money in the ordinary way by the issuing of stocks and shares owing to the threat of nationalisation. That is quite understandable because nationalisation has cast its shadow before it for some considerable time in the case of every nationalised industry. It is a regrettable fact that it appears as if on nationalisation these loan contracts are going to be partially dishonoured. That is something which has never happened before in the gas industry, and I hope that some means will be found to prevent it happening in the nationalised gas industry.
The reason is that under Section 17 (6) of the Act, gas boards may not take over liabilities and obligations in respect of securities. Therefore, they may not pay cash; they have to pay for them by issuing Gas Stock. That being so, the same thing has happened as happened to the holders of securities—since about the second half of June they have nearly all had to be paid off at a considerable discount. I will give one actual instance of a dishonoured loan. Near Manchester there is the Mossley and Saddleworth Gas Company which in 1946 borrowed some £75,000 under two different loans in order to extend their works and their mains. The money was borrowed on an arrangement to repair at par in five years' time—in 1951. At the time the money was borrowed both sides were confident that it would be repaid at par. The gas company naturally hoped that nationalisation would not take place and that sooner or later they would be able to fund the loans in the form of securities. On the other hand, if unfortunately nationalisation did take place, the company believed that the British Government would be prepared, as they were, to repay the debt.
The Gas Council and the area board are now repudiating the covenant to repay the cash, contending that these loans were really securities, and. there-

fore, must be paid off in British Gas Stock. The lenders have been offered repayment at a discount of 15 per cent. which would actually show them a loss of twice the amount which they would have received by way of interest on the loans during the five years in question. It is really a ridiculous position. They are not shareholders at all. The persons lending the money lent it in the same way as people provide raw materials for industry; they lent it not in the form of a permanent investment or anything of that sort, but as a business transaction. I feel that these cases concerning creditors are perhaps the worst that I have to bring forward, and I particularly hope that the Minister in his reply will be able to give some satisfaction to these people.
I should now like to deal with the case of co-partners, and I think I can best illustrate what I have to say by giving the House an example of what happened to a large gas company very near my own constituency. It is the Brighton Gas Company, and I would say at once that they have not asked me to raise this matter for them, and that I am doing it entirely on my own account. This company had its valuation delayed partly because some of its stock was subject to claim under Section 26 of the Act, and partly because some of it was unquoted. That, of course, required computation and agreement between the stockholders' representative and the Ministry. The trustees and co-partners of that company held some £140,000 worth of 5 per cent. standard consolidated stock. It was not until 25th July this year that the value of that stock was announced. It was then stated that £135 of British Gas Stock would be issued to compensate for £100 of this stock.
Had that announcement been made on vesting day, and had they received the British Gas Stock on that basis, these people would have been able to realise over £189,000 on the sale of that British Gas Stock. As it was, when it was eventually issued, the stock had fallen to 94, and the co-partners received only £177,660, showing a loss of over £11,000. Actually, I believe that they have held on to it, and therefore the loss today is considerably greater—somewhere be-between £18,000 and £19,000. I feel that that is very hard on co-partners


because they have been sufferers under this Act in a number of other ways also, and I hope that the Minister can find some way of meeting their case.
Next I come to the question of shareholders. In this connection I should like to quote an actual case of certain trustees who held stock in the East Cowes Gas Company. They held £750 worth of the original ordinary stock which was unquoted on the Stock Exchange, as very often happens in the case of stocks of the smaller companies. Agreement was only reached between the stockholders' representative and the Ministry with regard to this stock on 12th October, when it was agreed that £210 of British Gas Stock was exchangeable for £100 of the East Cowes Gas Company's ordinary stock.
On 12th October, British Gas Stock stood at a discount of 12 per cent. and therefore there was a very considerable loss at that date. But a further injury was inflicted inasmuch as no stock was actually issued until the third week in November. By that time the price was 83 middle, and a further considerable loss was incurred. The trustees are in a difficult position. They cannot gamble on what is going to happen. They cannot sell and deliver later. They just have to sit and hold on to these stocks and watch them rapidly depreciate in value. Between 30th April and 12th October they could not sell their stock because no one knew its real value. If they had done so, they would have been speculating on trust funds, which they obviously could not do.
In the second period from 12th October to the third week in November, they could not sell because they had not got delivery of the stock. The stock had not been issued. So that in the end, the day arrived when they were in a position to sell, on receiving the stock, at a 17 per cent. discount. For that they had been waiting five and a half months, all the time watching the value of British Gas Stock falling. As I have said before, the fact that British Gas Stock had not been on tap and issued more often has added an additional hardship to the hardship of the discount, caused by the fall in the value of Government securities. I think

that is a good example of the hardship inflicted by this inadequate machinery.
While speaking of securities I want to mention one other kind of stock known as redeemable shares. The position of holders of redeemable shares is not unlike that of the creditors to whom I referred just now. In most cases they arose through companies being unable to issue ordinary stocks and shares when they wanted to raise capital, owing to the threat of nationalisation. The only way they could issue them—and it was not at all easy—was by having some very short-dated shares which were more like a note. For instance, the Shrewsbury Gas Company issued 4 per cent. preference shares redeemable in 1962, which at first sight are not unattractive, but actually the threat of nationalisation was such that 99 per cent. of them were left with the underwriters. These redeemable shares are practically a debt, and I think that those who hold them and who are now being paid off at a very considerable discount should receive consideration in the same way as the holders of other securities and creditors.
As regards the holders of securities, the Minister might say that the gas shares would have fallen in value anyhow, that if people still held the original gas shares and there had been no nationalisation they would have suffered a considerable loss because the shares would have depreciated in value in the same way as Government stocks have done. That is a hypothetical line of thought which is difficult to follow. I do not believe it is right, and I think the consensus of opinion in the City would support my view that those shares would not have fallen so quickly. It is difficult to prove it.
In July I tried to find out what other public utility companies' shares had done over the same period. The water companies' shares are about the only ones that can be considered, and there are not very many of them, so that I feel I would not be justified in drawing any conclusion from that fine of research. I would make this point, that whereas the gas securities were valued when they were depressed by war conditions, the Government securities had their value at a time when Government stocks stood high. Therefore, there was much less scope for a fall in the case of gas securities than


there was in the case of Government securities. I still feel that probably if the original gas securities had been held they would not have shown so great a loss.
I now come to certain remedies which we suggest might be applied. The Minister might know of some better remedies. I hope he will consider the suggestions I am about to make, and if he can better them we shall be very pleased. There are three main remedies. First of all, an amendment might be made to the Gas Act, 1948, whereby the valuation might be arranged to be made at the date of issue. I think it would only mean quite a small alteration in Section 25 (1). There are provisions in the Coal Nationalisation Act which are very similar. I suppose an amending Gas Bill will be introduced in due course, as in the case of coal.
My second suggestion involves action by the Minister himself. Could he not agree higher compensation values for securities as they are taken? I believe he has power to do that under Section 25 (10) of the Act. I appreciate that both these suggestions come up against a certain difficulty. They would help those who still remained to receive compensation, but they would not help those who received compensation between the few weeks after vesting date when National Gas Stock held its own at par or thereabouts and the present time when it stands at a discount.
Therefore, in our Motion we have suggested a third remedy, and I believe it might very well be adopted. Our suggestion is that with the consent of the Minister and the approval of the Treasury, the Gas Council could issue a very short dated stock—a sort of Treasury bond with a life of two or three years or something of that kind. The Act and the Regulations which have been issued provide powers for this to be done. I recollect that both in the Electricity and Transport Acts there are more than one class of stock. I recognise, of course, that the Minister cannot compel the Gas Council to do anything of this sort unless he thinks that Section 7 is relevant. That Section gives him powers to give that Council
such directions of a general character as to the exercise and performance … of their functions as appear to the Minister to be requisite in the national interest ….

It is really very much in the national interest that the nationalised gas industry in its infancy should not repudiate creditors.
I cannot help feeling that the Minister need not exert much pressure; for I feel that the Gas Council must be sympathetic. After all, it is their honour which is at stake and all that is really needed is the Minister's consent. I am strengthened in my belief by the Minister's answer to a Question the other day when he showed a much more conciliatory spirit than when I raised this matter last July. I believe that, as a way out of the difficulty created by the unfairness towards those gravely injured, it might be practicable to offer to the original allottees of British Gas Stock a short option to exchange into the new gas stock, as suggested in the Motion. The option could be sold if the original allotment were not retained.
I have tried to put the case as reasonably as possible. A great many controversial points have been brought up on this subject, but I have tried to avoid them. I trust that the Minister will consider the matter in the same way and will give us a favourable answer. He believes in nationalisation. We recognise it as something which, unfortunately, has to be accepted. It may be modified as much as possible but, by and large, it has to be accepted. I am sure it is in the interests of both sides that, behind the battle which is taking place, there should be the smallest possible number of wounded, disabled and disgruntled persons. If we have a great many such people it can only make the position more difficult.
I believe this great hardship has been caused by faulty machinery and faulty timing. I am sure it was not intended and presumably it was not anticipated by the Minister and the Ministry. I must say, however, that the lack of foresight was a crime in itself. What has happened is quite contrary to the traditions, more than a century old, of the gas industry, which has been most punctilious in matters of this kind. In order that those traditions may remain untarnished in the new set-up of the gas industry, which the Minister has largely been responsible for bringing about, I hope that the Minister will find some way of satisfying these at present extremely dissatisfied people.

General Sir George Jeffreys: I beg to second the Motion.

4.14 p.m.

Mr. Spearman: My hon. and gallant Friend the Member for East Grinstead (Colonel Clarke), who so admirably opened this Debate, referred to the fact that some of us did not know the background to the same extent as he knew it himself, because we did not have the advantage of sitting on the Committee which dealt with the Bill. I must say that at the time it seemed to me a rather questionable advantage to be on that Committee, and perhaps the Minister would share that view, but as I was not on it, I shall confine myself to one aspect alone.
It seems to me that whereas there might be great difference of opinion on different sides of the House as to what is fair compensation, all hon. Members would agree that there should be the same treatment for all shareholders. As far as I know, in the other nationalisation schemes, however much there might be disagreement as to the fairness of compensation, everyone was treated the same. In this case, as my hon. and gallant Friend has shown, that is not so. I have made a calculation and I find that shareholders to the extent of £77 million, or 40 per cent. of the total, got compensation in the form of gas stock which they were able to sell at par, if they wanted to do so. Such a person, therefore, received £100. But £93 million, or about 50 per cent., got compensation at a later date, at a time when the stock was, on an average, at a discount of 10 per cent. Consequently, for every £100, they received £10 less than those who were fortunate enough to have their compensation dealt with at the beginning.
It is not their fault that they were dealt with later, or indeed the fault of the Government that some were taken several months afterwards through no choice of their own, but it seems entirely inequitable that compensation should be quite different. Perhaps I may give a concrete example. Mr. A., who had a holding of £100 of debenture stock in the Southampton Gas Company, had that assessed at the value of £102 10s. of the new gas issue, and he had that agreed on 3rd June and, therefore, was able to sell his holding of the gas stock for £102 10s. Mr. B, who owned the same amount in the Ilford 4 per cent. gas stock debenture issue—£100—which

was also assessed at the same price, did not receive it until 12th October, when he was able to sell it at only 88¾. Thus, in fact, he received £91, or £11 less than Mr. A who had his holding in another stock.
The Minister may say that if Mr. A had not sold his gas stock then he would be no better off today than Mr. B, or that if Mr. A had sold his stock and invested in war loans or some other stock which has fallen by the same amount, then again he would be no better off than Mr. B. Of course, that is so, but how about a man who had a loan from his bank to buy his house or for some other good reason and who paid off his loan when he had his stock repaid? In that case Mr. B is £11 worse off than Mr. A. Or there is the case where Mr. A thought that Government stocks were going to fall in price and, therefore, when he got his gas stock he did not keep it but bought a war bond issue with a short maturity date which has hardly fallen at all. In that case, again, Mr. B is, roughly speaking, £10 worse off than the other man for every £100 of stock he held. It must be entirely inequitable that, on the pure chance of when the stock was valued by the Government, the holder should receive an entirely different value.

Mr. Palmer: That is true if Government stocks fall, but what if they rise? Suppose compensation were paid at a time when Government stocks were appreciating in value: would the hon. Member be in favour of a payment being made from the shareholder to the Gas Council in a case like that?

Mr. Spearman: I am not dealing with that situation at all. I am suggesting that it should be done in such a way that the man has not to run the risk of the market. I do not think that should be in the contract at all. If I might return to my point, I have dealt with the situation of £93 million, or 50 per cent., who all received £10 less per £100 than the people who were dealt with first.
There is a third section of £15 million, or 8 per cent. of the total, who have not yet been paid back and so cannot sell their stock at all. Their position is an unknown quantity. It may be, as the hon. Member for Wimbledon (Mr. Palmer)


said, that there will be a sharp rise in Government stocks and that these people will not lose, but it is very unlikely that they can gain, for it is unlikely that there will be a rise of 10 points. It is quite possible that these people's losses may be less than in the case of Mr. B. Equally it is quite possible that their losses will be a great deal more.
Therefore I am suggesting that the least the Minister can do—and this in no way amends the inequity to which I have referred—to limit, at any rate, the possible loss to these unfortunate people—and I should like to stress that these £15 million worth of securities were mainly held in small companies by small shareholders, whose suffering may be more acute—is to see that they shall not be any worse off than anyone has been yet. The Minister should say they will pay them off—not at 100 which would be unfair to the others and would alter the situation—but on such terms as to treat them not worse than the worst treated man so far.
It is not, obviously, my job to predict how these people may be affected by anticipating what future movements of Government stocks are likely to be, but I would put these three propositions to the Minister, with which, I think, he must agree. First of all, that the value of the compensation depends upon the price at which Government Gas Stock stands at the time when it is received. Secondly, that the price of Government stocks must be lower in the future if the demand for capital exceeds savings, except in so far as physical controls are brought in by the Government of a vastly greater nature to deal with the situation.

The Minister of Fuel and Power (Mr. Gaitskell): I would not agree.

Mr. Spearman: I would not try to teach the right hon. Gentleman economics: we know he is an expert in them; but I think that is a simple economic proposition which he cannot deny. Third—and, perhaps, this proposition is questionable, but I think the right hon. Gentleman will find that nearly all the authorities agree—at the present time demand is greater than savings. Therefore, we are facing here the fact that there is likely to be on those premises a fall in the gilt-edged market.
If the right hon. Gentleman will get up and say that the Government are going to make such drastic cuts in Government expenditure before the election—that straight away they are going to do it—that savings and demand will be at balance, then I should not be so unhappy about those wretched people. Secondly, if he will say that the Government—and I doubt if he will be prepared to say this before the election—are going to bring in a vast increase in physical controls, vastly greater rationing—that is, cutting down supplies all round—then, I agree again, the gilt-edged market may not fall.
Unless, however, one of those two things is done sooner or later, the price of Government stocks is bound to come down, and, therefore, the liability on this, 8 per cent. is a quite unknown one. Therefore, I ask the right hon. Gentleman to see whether he cannot limit the loss that they will suffer by saying that, at any rate, those people whose claims are not settled, whatever may happen to the gilt-edged market, will get either cash, or short-dated Government stock that cannot fall, on terms which will make them no worse off than that shareholder who has, so far, come off worst of all the others.

4.23 p.m.

Sir John Mellor: I think the Minister will agree that, in the case of those Gas Stocks which have been valued since vesting date, the holders would get something much closer to their values as determined under the statute if they got a shorter dated stock. I think he will agree with that. I think he will also agree that it is practicable that they should be issued with a shorter dated stock. Even if the right hon. Gentleman has reason to say he is not prepared to bring that about, even if he is prepared to argue that such a course would be erroneous, I think he will agree still that it would be practicable.
Whether he would consider this, under Section 7 of the Act, a proper matter for directions to the Gas Council—that they should issue a shorter dated stock—I do not know, though I should imagine from his previous form, that he would say that the rate of interest payable and redemption date would be a day to day matter for the Gas Council. That has been the


sort of line taken by the right hon. Gentleman and his colleagues concerned with nationalised industries in the past. They have interpreted the day to day functions very widely indeed—so widely that they have denied to themselves, so far as I can see, the right to give directions to the nationalised boards on matters for which they are generally responsible.
However, be that as it may, suppose for the purpose of the argument the Minister says that he does not consider this to be a proper matter in which he should give directions to the Gas Council. At any rate, there are several other ways in which he can do it. Under the Act regulations have been made by the Minister with regard to the issue of Gas Stock, and the Gas Stock Regulations of 1949, which are contained in Statutory Regulation 751, provide that
The Gas Council may issue such class or classes of stock as it may determine … and, subject to the provisions of the Act, the stock may be issued on such date by such method for such amount at such price at such a rate of interest and subject to redemption on such conditions as the Gas Council with the consent of the Minister and' the approval of the Treasury may determine.
Therefore, it is impossible for the Gas Council to issue stock without the assent of both the Minister and the Treasury to all the terms attaching, and certainly the Minister has considerable authority in this matter. However, I think that in his own confession in answer to a supplementary question which I put to him on 28th November he made it clear that, in practice, he, as Minister, can arrange the terms of the stock to be issued, because he said this:
There would be no statutory barrier for my arranging for the issue of short-dated stock, but I explained in my original answer why we chose not to do so.
Therefore, I think the right hon. Gentleman will admit that he has control over this question as to the rate of interest and terms of issue attaching—and, particularly, to the date of redemption attaching—to any stock which may be issued by the Gas Council.
Now I think it only right that I should refer to the original answer in which the right hon. Gentleman explained why he chose not to require the Gas Council to issue shorter dated stock in compensation for these Gas Stocks which had been

valued since the vesting date. This was what the right hon. Gentleman said:
It is a principle of sound finance that public utilities should borrow as long as possible for capital works. Adherence to this principle was particularly desirable in the case of British Gas Stock 1990–95 which was issued as compensation and in replacement of long term or even irredeemable securities of the old undertakings."—[OFFICIAL REPORT, 28th November, 1949; Vol. 470, c. 769.]
It is perfectly true that a number of stocks of the old undertakings were long-term, and even irredeemable; but a great many were not; there were a great many stocks which were medium or short-dated. Now, I picked out at random Statutory Instrument 1285 of 1949, which provided that the conversion date for a number of stocks should be 11th July of this year. Looking at those on the first page, on which there are detailed 14 of the old gas stocks, I find that five are either short or medium date. Out of 14 stocks, some of which may well have been irredeemable or long term, the first stock mentioned is redeemable in 1950, the second in 1960, the third in 1951, the fourth in 1953, and the fifth in 1955. Some of the others may also have been of medium date. I do not know, because their dates are not given.
The Minister is trying to justify giving long term stock—it is the longest term stock in the gilt-edged market, apart from the irredeemables—in all cases, regardless of the date of redemption of the stock for which it is given in compensation, because he says it is a good principle of finance for public utilities that they should borrow as long as possible for capital works. I quite agree that it is, but at the same time I do not think it right that he should abandon all principles of justice in order to adhere to that principle, as he clearly is doing—and doing so on the very assumption contained in his answer—if he proposes giving to medium and short-dated stockholders of the old gas companies this Gas Stock redeemable 1990–95. Indeed, my hon. and gallant Friend mentioned one security as an example of many others, where a loan which was repayable in a couple of years was treated as a security and compensated with Gas Stock 1990–95. I feel that the whole treatment of this matter has been singularly unsatisfactory.
If one looks at the course of Stock Exchange prices—and it has been the same story every time we have had a vesting date—the gilt-edged market has been held fairly steady and fairly strong for some time before vesting date, and the moment vesting date is over it has been let go because it no longer matters to the Government. I looked at the price of British Transport Stock 1978–88—during the months preceding the Gas Act vesting date, which was 1st May. Taking the price from the end of October, 1948, down to the end of April, 1949, I found that the price of British Transport Stock 1978–88 had been pretty steady, between 100 and 102. I have taken that stock because it was the longest-dated stock then in existence which one could consider as comparable with the Gas Stock 1990–95. As soon as the vesting date had passed, all long-dated gilt-edged stocks slumped; Transport Stock went down to 96, and Gas Stock down to 95; and, of course, they have accompanied each other downwards, the Gas Stock always being a bit below the Transport Stock because the date of redemption is somewhat longer.
I think that shows that the method of manipulation—which I have debated on previous occasions with the Financial Secretary, who I am sorry has now left us—has been singularly unfair: all in favour of the Government and all against the stockholder. I should have forgiven the Government if they had done a little manipulating after vesting date; if they had said "Well, in fairness to the gas stockholders who wish to realise, we must sustain the gilt-edged price for a time after vesting date, so as to give them a chance of getting out if they want to." While I strongly disapprove of the Government doing anything to manipulate the stock market, that would at least have been inspired by a sense of justice. But they have no sense of fairness in this matter; they just let prices take their course after vesting date, although they hold them up before it.
I think that my hon. and gallant Friend has put forward a very fair remedy: that the Minister should instruct the Gas Council to issue a short-dated stock, because if they give a really short-dated stock there would be virtually no loss on the take over price for the stockholders. I think that that is the correct course to

adopt, and that conversion rights should be given to those gas stockholders who have already passed their conversion date, I very much hope that the Minister will today give us an answer which will enable us to see that he has some sense of justice in this matter.

4.37 p.m.

Mr. Drayson: I am afraid that I can only regard this matter as another Socialist swindle, because although it is possible that the Minister's intentions might have been good on vesting date, on 1st May, since then he has come up to our expectations. A point we must consider is: If it was agreed that stocks should be issued at par on vesting date, why was it not also agreed that that should be done so that the various companies which had not yet been valued, or which had unquoted securities, should also receive a stock that would be valued at par on the day on which it was allotted to them? Since vesting date there have been issued a number of schedules of companies for whom a valuation had been fixed.
I have a particular case in my constituency, that of the Settle Gas Company. The compensation price was fixed on 16th September, four and a half months after vesting date, and the stock would not be available for sale till 21st November, some considerable date later. From the moment of knowing what stock is to be allotted it is possible that stockholders might be able to sell their new Gas Stock in the market, on an understanding that they would not be able to deliver that stock for some weeks to come. That would, of course, mean being a bear of the stock, or a protected bear, because they would get their stock back at the time it was issued to them some weeks later. I understand that is a practice the Government do not like. The Chancellor now tells them that it is his object in life to "squeeze bears." We often wondered what he did in his leisure moments. Now we know. The Settle Gas Company had £10 shares which had paid a maximum dividend of 5 per cent. for many years. They were bought out at £10 5s., which gives a return of about £4 19s.
Another instance, in Yorkshire, is that of the Thirsk Gas Company. Here the valuation was fixed for the £10 share not at £10 5s. but at £11, giving a return of


£4 15s. Why cannot the Government fix a definite rate that would apply to all companies. I should have thought that in any case the 4½ per cent. yield basis would have been more reasonable than paying out to these companies at £4 15s. and £4 19s. respectively. I do not know why Thirsk should have been more favourably treated than Settle. It is quite obvious that, now that these holders are to get 3 per cent. Gas Stock in its place, that they will suffer a loss of income of something like 35s. per £100 of capital per year.
The reason that the Government intended to issue stock that would be at par with other securities on the vesting date was, of course, that the holders, if they were going to suffer a loss of income—and practically every one of them did—would have an opportunity of selling their securities forthwith and finding an alternative investment. That is a proposition which has been denied to these other companies whose compensation value has been held up for four or five months, and no doubt to many companies for whom a valuation has not yet been fixed. These people have not been able to make an alternative investment, and if they get compensation stock, they will find that it stands in the market, as we have already been told, at 10 points discount.
It is significant that no hon. Member on the Government Benches has spoken today on this subject. From that we can assume that very few of them understand it, or, perhaps, that they are not concerned with people who have built up a little capital and have lent their money to local gas undertakings so that they could provide the public with a suitable service. Perhaps they think that they should not in any way receive fair compensation for their thrift and enterprise in helping to establish these public services over the past decades.
I hope that the Minister will be able to inform us on what basis these valuations are fixed. What rules have the Commission set on which they base their figures? Now that we see the violent movements that are taking place in the gilt edge market, if some possible valuation could be arrived at for the stockholders of non-quoted companies, they would at least be in a position to sell

a portion of their Gas Stock even at 90, and finally complete the transaction when their compensation figure was fixed.
The point has been made that it would be quite possible to issue stock at varying dates other than that of the original Gas Stock. I wonder what possible objection the Minister could have to doing that. It may be said that it would be inconvenient to issue a series of stock all carrying different dates, perhaps a new Gas Stock every month, but it should be possible to wait until one had valued companies to the value of several million pounds and then publish a schedule of the compensation fixed on all these companies so that the number of the different dated Gas Stocks which would have to be issued could be limited as much as possible. I cannot see what objection the Minister can have to doing something in that way.
It is the intention to issue stock which could be sold for cash at par on the date the compensation was fixed. Surely, if compensation was fixed at a date other than the vesting date, it should be possible to issue stock which would realise cash at the value at which it was then fixed. Now, as has been said, we are getting stock 10 per cent. less in value than that received by those who knew the value of their holdings on the vesting day. I think that the Government are making a great mistake. This take-over in many instances has been a matter of considerable hardship to a number of small holders in these local companies which had not much market on the Stock Exchange, if any market at all. It is the small local companies where the money has invariably been subscribed by people of modest means in the locality, who are now suffering most. I hope that it is not too late for the Government to do something to remedy this defect.

4.48 p.m.

Mr. Gallacher: I think that the hon. Member for Skipton (Mr. Drayson) showed a peculiar type of courage when he used the term "swindle." That is a very suspicious term in the minds of the workers of this country because they have long been accustomed to swindles in this particular matter of handling stock and paying out compensation. Personally, I am against compensation in ordinary terms—but we are not discussing that today—and I am


against this Motion. If the hon. Gentleman or any of his Friends can get up and give me a particular case of a stockholder in any of these gas companies who is in the unfortunate position of having to go to the Assistance Board for supplementary assistance, it might be possible to give some consideration to their plea.
The Stock Exchange is a gamble and all the transactions on it are gambles. Here we have a situation in which we are told that the stocks were issued and by the time of the vesting date they had fallen very considerably. If there had been a decision to issue the stock, and the stock had begun to rise before the vesting date, would there have been any suggestion from the other side that the compensation should be cut?

Mr. Drayson: It is quite obvious from what I said during my remarks that the hon. Gentleman has no idea of what this is all about.

Mr. Gallacher: The hon. Gentleman said that these stockholders would lose about 35s. on £100 capital.

Mr. Drayson: Income per annum.

Mr. Gallacher: The hon. Gentleman said that all the nationalised industries had been affected in the same way. He said that the gas companies should be put in the same relation, so far as the stock is concerned, as the others, although the others, all of them, have lost. The fact is that the stockholders in the mining industry have not lost anything. They are getting more today than they would be receiving if they still owned the industry. If the industry had not been nationalised, the mines would be completely bankrupt. The railway stockholders received compensation at a rate of interest of 2½ per cent., which the Chancellor of the Exchequer raised to 3 per cent., but no one suggested that the railway shareholders should have their compensation reduced in view of that rise in the rate of interest. We did not hear any such suggestions.
I would remind Members opposite of the exhortation made by the Chancellor of the Exchequer. It was directed to the workers, not to Members opposite, because I am certain the Chancellor of the Exchequer knows what they are made of, just as I do. His exhortation was to think of spiritual things and not of material things. Just now we are hearing a lot

about preparing for the festivities of Christmas, but all we get from Members opposite is "Money, money, money." They can think of nothing else. All they think about is compensation for those who own stock in the gas industry, rather than running the industry in the interests of the people.
These gas companies were run for profit and for "soaking" the people, particularly in some of the small places. Members opposite come here and talk about these people running the gas companies in the national interest, but the fact is that it has been necessary, in the public interest, to take over this industry and reorganise it.

Mr. Spearman: The hon. Member has told us he does not agree with compensation, and on that we can agree to differ, but what does he think about this? If there is to be compensation, does he not think it should be the same for everyone?

Mr. Gallacher: No, Sir. I would make it progressively less. I would suggest giving the owners of these undertakings the same allowance as they are now getting, for the rest of their natural lives, and for the allowance then to finish. That is how it should work. According to what we have been told, these companies have been giving service to the community, but they have been doing it at a profit.
But, look at the workers and the service they have given for 50 years in the mines, mills and shipyards. What about the working-class mothers who have run their homes for 50 years to keep industry going? All their life and capital has been invested in serving the nation. Why are we not discussing them today, and the question of 42s. a week for a man and wife? Why are we not discussing the old age pensioners, who are more deserving than any of these stockholders? If this House were doing its duty, it would not be wasting time on a Motion of this kind, but considering what money is available in the country and using it for the veterans of industry who deserve a proper and decent living. I ask the Minister to repudiate this Motion and the mercenary instincts responsible for it, represented by Members opposite.

4.55 p.m.

Mr. Emrys Hughes: I wish to emphasise some of the points


which have been made by the hon. Member for West Fife (Mr. Gallacher), although I would not go so far as to suggest immediate confiscation. I agree with much of the philosophy he has put before the House. I am quite prepared to accept the principle of compensation for shareholders in gas companies, provided it is deferred. I am in favour of paying a good deal of this compensation in post-crisis credits. At Question Time the other day the Chancellor of the Exchequer agreed to give very careful consideration to a point of view I put forward, which I hope to explain in a memorandum.

Mr. Gallacher: I want to endorse that sentiment and the proposal. From that point of view, the longer the crisis lasts the better.

Mr. Hughes: I have already converted the hon. Member for West Fife, and I hope that I shall now be able to gain the support of the Opposition.

Mr. Spearman: Is the hon. Member suggesting there should be repudiation of payments on all Government stocks until after the crisis ends, or is he singling out gas stockholders for this discrimination?

Mr. Hughes: If the hon. Member will have a little patience, I shall explain in detail just what I mean, and he will then agree that there is an element of common sense and justice in the proposal. I am sure the proposal will commend itself to the Financial Secretary to the Treasury, who has just arrived, because it will help to ease his burden. I do not suggest repudiating Government stocks, but that the wealthy owners of Government stocks should be asked to have their payments of compensation deferred until the nation is out of this economic and financial crisis.
Members of the Opposition are always arguing, and we agree with them, that we should review national expenditure, and, like the hon. Member for West Fife, I am alarmed at the progressive increase in national expenditure by way of compensation to these different industries. I agree that widows and poor people who have put their savings into gas companies should not be treated with the same lack of generosity that has been

shown to the employees in the industry, but I do not think for one moment that the majority of people who are likely to receive these sums of compensation come under this category. I have in mind the various small companies that used to own gas works in the West of Scotland.
I can remember when I first went on a town council in the West of Scotland. It was a small town where the gas works were owned by a gentleman who was the part-time town clerk. When I went on this town council, I began to look into the ramifications of the gas company. There was a move afoot to get electricity into the town, and I moved a motion that we should attempt to get electricity laid on to bring our town into line with other progressive communities. When we went to the Electricity Board, we were told: "Oh, we have been told by the town clerk, who is chairman of the gas company, that the people do not want electricity." I mention this to show that gas shareholders are not always the most enlightened and progressive members of the community. The gentleman concerned is now deceased, but his descendants are presumably drawing compensation. The wealth of this country's shareholders is concentrated in the hands of very few people. To argue that the big shareholders should receive compensation when there are very many less prosperous members of the community is intolerable.
The bill for compensation is steadily mounting, and I would like the Minister to inquire into this matter with a view to finding out how many coal industry shareholders were also shareholders in gas, electricity and iron and steel companies. At this time, when we hear so much talk about inflation, the Opposition are asking for money for those who could wait until we had got out of the present crisis. We have already established the principle of post-war credits, and in this matter the wealthier shareholders should be asked to be patriotic. We should say to them, "Until the nation is out of this crisis, will you be generous enough to accept a large or the entire proportion of your compensation in post-crisis credits?" The date of the end of the crisis could be fixed later by the Government. If we did that I believe that the position of the Treasury would be greatly eased. If compensation increases, costs will be added to industry. When the accounts of the gas industry are placed before the public the


Opposition will cry "Look at the losses." What they are asking us to agree to today is a thoughtless and shortsighted policy which is not in the interests of the community.
I remember reading a report of an eloquent speech made at the Conservative Party conference by a gas worker. It was the sensation of that conference. This man, who said he had eight children, went on to the platform to say how much gas workers objected to nationalisation of the gas industry. He should not have been at that conference; he should have been at the British Museum. This worker had a tumultuous reception, even more tumultuous than that given to the Leader of the Opposition, because it was thought that the conference had before them a genuine member of the working class who was expressing the working class view. It was, of course, all eyewash. So is this talk about injustice to widows and orphans. The Opposition's case is nothing but a demand for more loot for vested interests, and I hope the Government will not yield. I hope they will say that there are other far more important liabilities, such as holidays with pay for gas workers and miners, and will adopt my suggestion of post-crisis credits as an alternative to the extortionate demands which have been put before the House today from the Conservative benches.

Colonel Clarke: If the hon. Gentleman had listened to my speech in opening the Debate he would remember that I asked for another form of gas stock with a shorter date and, therefore, a lower rate of interest, to be issued in future as compensation and to be interchangeable with the old stock. I do not know how that can cost the country more.

Mr. Hughes: I proposed long-dated gas stock, which would cost the country less.

5.5 p.m.

Mr. Enroll: There is little doubt that the hon. Member for South Ayrshire (Mr. Emrys Hughes) is one of the biggest gas producers in the House and that it is laughing gas which he produces, so it is not to be taken too seriously. I will turn, therefore, to the question of the shareholders themselves. I wish hon. Members opposite would disabuse their minds of the notion that there is something wrong in being a shareholder in a company,

whether a gas company or any other company. It is surely right and proper to put one's money into a productive enterprise. The hon. Member for West Fife (Mr. Gallacher) may vituperate about shareholders, and say that we on this side always talk about money, but the fact is that the business of this country is conducted by means of money and that the Government are constantly urging that money should be put into business so that it may function efficiently.

Mr. Gallacher: Will not the hon. Gentleman admit that workers who have given 50 years of their lives in industry are responsible for the country's prosperity? Will he tell me how much money they get when their term of service is over?

Mr. Erroll: They got 50 years' wages, and without capital and managers there would have been little work for the gas workers to do. It is a partnership; one is not much good without the other.
While the subject today may be money—and we need not apologise for that—the real theme is the spirit of fair play. We are debating fair play for those who invested their money in the gas industry. I do not think that the Government deliberately planned anything so unfair as what has occurred. In connection with previous nationalisation Bills the vast bulk of the securities could be taken over on the vesting date, and thus a clean transfer could be made. I know there have been some exceptions, and that under the Iron and Steel Act there wilt probably be some more if that Act is implemented, but what was not fully realised, I think, was how long the delay would be in paying out compensation in respect of a number of small undertakings.
The Bill which nationalised the gas industry was planned in the days of expanding credits, when it seemed that everything would rise or remain stationary. I do not think that anyone considered fully enough at the time the continued and steady fall there would be in the value of securities. I know it may be argued by the Government that even if the capital value of the compensation has fallen it matters little because the holder is still able to get his interest, unimpaired. But that point serves only to demonstrate the fallacy of the hon.


Member for South Ayrshire, that by asking for more loot, as he politely described it, we would increase the overheads of the gas industry. In fact, of course, the interest to be paid remains exactly the same no matter what is the market value of the gas stock at any particular time.
The real point is with the marginal case of those who wish to sell their stock. The argument has been put forward by a number of Members this afternoon that to provide all this money would be an inflationary feature of our economy, and it ought to be stopped or deferred. The device adopted by the Government in issuing compensation stock was not to issue money, so that there has been no inflationary factor at all. However, it was recognised in the early days of the Coal Industry (Nationalisation) Act that it should be permissible for recipients of compensation stock to cash or transfer it if they so wished. What is so patently unfair today is that no stockholder, who may wish to realise his compensation stock, can, in fact, get the value for it to which he is really entitled, although it is plainly laid down in the Act.
It is unfair to the stockholder, but it is even more unfair to the creditor. We must not think of this compensation stock being issued only to stockholders. It has been issued to a number of short-term creditors. They lent money to gas companies when they were unable to raise capital in the normal way, either because of the threat of nationalisation or because of the post-war uncertainty. In many cases the companies were able to get short-term loans from individuals or organisations specialising in such loans for perhaps four or five years at a very reasonable rate of interest, 3½ or 4 per cent. These loans it was understood both by the creditor and the borrower would be repaid in cash at the end of the period. However, it has been decreed otherwise. It has been decided that these loans are to rank as securities, and they are to be paid for in gas compensation stock.
We have the position that a creditor who has perhaps loaned £10,000 as a short-term loan to a small gas company is only, in fact, going to receive back gas compensation stock to the present value of £9,000 if he is, in fact, able to realise it at that value. There can be no question of that being loot or of grasping share-

holders. How would hon. Members opposite like if they loaned money to someone

Mr. Fernyhough: Nine thousand pounds?

Mr. Erroll: It is not the sum but the principle which counts. A loan of a few shillings is as important as a loan of thousands of pounds. There are plenty of hon. Members opposite who could easily loan £9,000.

Mr. Gallacher: Introduce to me one of them.

Lieut.-Colonel Elliot: Meet Mr. Strauss.

Mr. Erroll: It is surely the principle that is important. How would any hon. Member opposite like to make a short loan on the definite understanding that it was to be repaid in full at the end of an agreed period, and then find that, instead of getting his money back, he was being paid in compensation stock, which could not be sold on the free market at a price sufficient to repay the original loan. That is the position today and it is very unfair. There is another class of aggrieved person—the gas worker who took part in the co-partnership scheme. I should like to reassure the hon. Member for South Ayrshire that while we gave great applause to the gas worker at our conference, we reserved the greatest applause for the Leader of our party when he came to Earls Court.

Mr. Emrys Hughes: To which gas worker is the hon. Member referring?

Mr. Erroll: As that was my joke previously, the hon. Gentleman might try to be original.
I do not intend to go over the case again of the gas workers who invested in co-partnership schemes, except to say that they suffer from the same sense of injustice. They may still get their interest at the nominal rate, but the marginal seller is at a severe disadvantage, because should he need to realise his money—and there are many reasons for realising money in this country in these days—he is unable to get the full amount to which he is entitled. It may be argued by the Government that one must take the rough with the smooth and the downs with the ups, that had gas stock risen to


above par in the intervening months there would have been no complaints. It is quite likely there would have been no complaints from the recipients, but it would have been equally unreasonable because the important thing is to ensure that the compensation should be fair.

Mr. Palmer: When the hon. Gentleman the Member for Altrincham and Sale (Mr. Erroll) was out, I put a question to his hon. Friend. I should like to put it to him now. Would he be in favour of back payments to the authority?

Mr. Erroll: That would, of course, have to be gone into.

Mr. Fernyhongh: It is the principle.

Mr. Erroll: If the Government were to concede the one, I for one would be prepared to concede the other. I have not had an opportunity of consulting with my colleagues.

Mr. Palmer: It will be put on the record.

Lieut.-Colonel Elliot: There is no difficulty about putting it on the record. Speaking on behalf of the Opposition, I say if the Government would pay it in cash obviously there would be no objection, and then the question of a rise and fall would not arise.

Mr. Gallacher: That is not the point at all.

Mr. Erroll: Hon. Members opposite will see that we on this side think along the same lines without having to be coerced.

Mr. Daines: How many hon. Members opposite?

Mr. Erroll: The Minister may plead that it is not in his power to alter the present arrangements. It seems strange for him to make such a plea because, in fact, the Socialist Government have been able to do anything they liked during the last four years, and surely they would like the opportunity of introducing another little Bill in the New Year. A short amending Bill could put this matter right. Alternatively, the Gas Council, after consultation with the Minister and the Treasury, could prescribe the issue of short-dated stock for these late transfer payments. It was left to the Gas Council to take the initiative in regard to the

device of stock which was issued as compensation stock, and it could, if it chose, issue a short-dated stock, ensuring that it would not be liable to deteriorate as the existing Gas Stock has already done. In that way justice would be done.
If the Gas Council has not approached the Minister, surely the Minister is not insensitive to our demand, and he could make the approach to the Gas Council. Of course, another way out of the dilemma for those stockholders who have yet to be repaid would be to wait and risk the possibility of further deterioration in the price of Gas Stock in the hope that after the next Election there will be a more reasonable Minister in the place of the present one. That would seem to me to be the wisest course to pursue, for we would certainly put into such an office a Minister who would ensure fair play in matters of money as well as in the spirit.

5.20 p.m.

Brigadier Prior-Palmer: I will only speak for a very few moments in order to put to the Minister a point of view which has not, so far as I know, been put to him already. I would ask the question: Who is affected by this arrangement? Hon. Members opposite appear to think that it affects the very rich people, but I can assure them that it affects people who have very little money indeed, and far more severely than it affects any others. There are such people as the old and retired civil servants and their wives, and business men in a small way. [HON. MEMBERS: "Oh."] I am telling the House the truth, because I happen to have many thousands of such people in my constituency. They are people who have contributed in their life-time to no contributory pension scheme. They have saved up out of their salaries and earnings throughout the years and have invested their small amounts against their old age.

Mr. W. R. Williams: Does the hon. and gallant Gentleman really put the civil servants among the people who have never contributed to a pension scheme?

Brigadier Prior-Palmer: If I did so, I was wrong, because I know that civil servants have a pension scheme. Nevertheless, there are many thousands of people, who, owing to the high cost of living and high taxation, suffer very great hardships indeed. Particularly, there are


old ladies living by themselves—of whom there are thousands—who have a very small dribble of income from some small investment such as a gas holding. They are endeavouring to realise on some of these investments in order to continue to live. They have to live on capital in many cases because they are no longer able to live on the income from their capital. Their capital is running out and therefore in a very large number of cases it means a race between death and starvation. It is for these people that I put in a plea today. A large number of well meaning hon. Gentlemen on the other side of the House do not realise that it is only the small people who are seriously affected in this matter.

Mr. Mitchison (Kettering): rose —

Brigadier Prior-Palmer: I cannot give way to the hon. and learned Member because I said I would speak only for a very few moments.

Mr. Mitchison: I question the starvation.

Brigadier Prior-Palmer: It is so, indeed, and if the hon. and learned Member would care to come to my constituency I would take him round and show him old ladies who are unable to exist on their present incomes and are selling their capital in order to go on living. Sometimes they have the burden Of a house round their necks, a detached house which is far too expensive to continue to live in, but these old people can-hot get rid of them because there would be nowhere else for them to live. In a very small number of cases they are, I regret to say, moving into council houses and thereby depriving of accommodation those who should be living in council houses.
This position is becoming very serious indeed for a large section of the lower middle-class people all over the country. I would therefore ask the Minister to consider the hardship that the present proposal will cause to people who have done no harm to the Socialist Party, but have worked hard all their lives for a small salary from which they have saved up for their old age. Those are the people who will have to suffer, and I therefore ask the Minister to consider this matter from a humanitarian point of view with a view to helping those people.

5.24 p.m.

Mr. Fernyhough: I can hardly believe that the hon. and gallant Member for Worthing (Brigadier Prior-Palmer) would hope to convince the House that thousands of people are living on the borders of starvation as a result of the nationalisation of the gas industry, and, in consequence, are likely to die in the near future. If it is so, there are two suggestions I would make. The first is that it is a reflection upon the hon. and gallant Member, as their Member of Parliament, that he has not told them of the National Assistance Board, which deals with cases of starvation. It is also a reflection upon him that he has not told them that the National Assistance Board will help towards paying the rent of their houses, which some of them are having to vacate in order to go to council houses, and that the board will, generally, provide them with a minimum of assistance to maintain bodily health.

Mr. Erroll: Is the hon. Member aware of the discontent within his own party because of the inadequate scales of national assistance benefits and of the deputations of his own party to the National Assistance Board and to the Minister only last week?

Mr. Fernyhough: I am quite aware of it, but we have never said that people are suffering from starvation and are likely to die. If the hon. and gallant Member for Worthing were to talk to my constituents in Jarrow and try to convince them that what he has been saying this afternoon is good, sound argument, what would their answer be? The hon. and gallant Gentleman is pleading for people who have invested their savings in a particular industry which has now been taken over and nationalised. There were thousands of men in my Division who had nothing to invest except their skill and ability to work. They worked for 20, 30 or 40 years, and, when it suited some people, they were no longer wanted. What compensation did they get? They were employed by the friends of hon. Gentlemen opposite.
Can I go to the shipyard workers, the miners, the transport workers or the labourers and say: "Boys, you ought to be in favour of giving these stockholders more, although it will put a bit more expense on the industry, because it is reasonable and just that that should be


done." Are they not likely to turn round and say: "What kind of compensation have we had?" Let me give a personal illustration. In 1939, one of my brothers—all of them are colliers—was working in the pit in Burslem when he was badly injured. He was brought up more dead than alive. He lay in hospital for months. The coalowners' compensation, passed by a Tory Government to him, to keep himself, wife, and five children, was 30s. per week.
I am quite prepared to do something for those widows and very poor people who were mentioned by the hon. and gallant Member, and who are living near to the borderline of starvation* If I thought it was those people, in the main, who had been done an injustice by this proposal nobody would be more ready than I to press the Minister to assist them. By and large, what do we know? We know that, whether we look at the gas, the transport, the coal, or any other industry, we find that from 75 per cent. to 90 per cent. of the shares are concentrated in a very few hands.
Hon. Members on the other side know that they are not pleading for the little people but for the big people who have thousands of pounds invested, for the people who can live without anything else and just on the interest from these investments. It is very strange that whether it be the transport, the coal, the steel, the gas, or the electricity industry, or whatever other industry it may be, never once have the Government, in the opinion of the Opposition, been fair in their compensation. We look at the total amount of compensation paid, and we realise that many hon. Members have never had a single complaint from our constituencies.
Nobody has ever written to me from my Division, of dissatisfaction with compensation so far as electricity, the Bank of England, the gas industry, the railways or coal are concerned; none of them. Not one worker or widow has written to me to say that this compensation is bad or unjust. Many who have given a lifetime of service to industry have told me that far too much compensation has been paid. I agree with my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes); I think that it is nauseating that the party opposite should plaster the hoardings from one end of the country to

another with posters showing how much the nationalised industries have lost and then day after day come to this House and plead that a bigger burden should be put on the nationalised industries. It is not fair. It is hypocritical.
I should be quite prepared to deal with cases of poor struggling widows who, according to hon. Gentlemen opposite, are on the borderline of starvation. If cases of that kind can be brought forward, we shall press the Minister to deal with them sympathetically, but as far as the rest are concerned, the point which, has to be taken into consideration is that all those who deal in stocks and shares are essentially gamblers. Having seen what happened the day after devaluation, in Throgmorton Street and realising what was made on that occasion, my view is that the sooner the Stock Exchange is done away with the better it will be for the real workers in this country.

Sir John Barlow: The hon. Member has said that 75–90 per cent. of the shareholdings in the nationalised industries are in the hands of very large holders. Can he substantiate that statement or give any other information about it?

Mr. Fernyhough: I can only substantiate it on the basis which I have indicated. Nobody has ever written to me about it. I know thousands of workers, but I have never met one of these people who are supposed to have shares in the natonalised industries. Therefore, I take it, by and large, that it is a fair case to say that 75–90 per cent. is concentrated in the hands of comparatively few people.

Sir J. Barlow: Has the hon. Member no actual figures whatever?

Mr. Fernyhough: I could give the hon. Member some eventually.

5.33 p.m.

Mr. John Foster: The hon. Member for Jarrow (Mr. Fernyhough) said that if he was convinced that any widows or children were in danger of starvation or in financial straits he would press the Minister on this point. From what he said it is clear that he admits that the principle is unfair. We can start on the basis that the hon. Member is saying that in the case of a poor person it would be unfair, and that he would press the Minister, but that if


it is someone who is moderately well off or very well off, he does not care whether it is unfair or not and believes that they jolly well ought to pay. That is a moral principle with which we on this side cannot agree. This is a question of morals and ethics. I do not take the low view of hon. Gentlemen opposite, including the hon. Member for South Ayrshire (Mr. Emrys Hughes), about the attitude of the ordinary working man. I do not believe that ordinary working men—

Mr. Gallacher: The hon. Member ought to hear them sometimes.

Mr. Foster: I do. I represent an industrial constituency. They are all working men; there is nobody else in the constituency.

Mr. Emrys Hughes: The hon. Member says that he represents a constituency of working men. Has he had any serious demands from those working men for increased compensation for gas stock holders?

Mr. Foster: I am not on that point. I can quite understand the hon. Member for South Ayrshire wanting to deflate my very moral argument. A moral argument is the most powerful argument because it touches the conscience. As the moral argument develops, hon. Gentlemen opposite should ask themselves whether they really believe that they are doing justice to themselves.

Mr. Fernyhough: These people have been given or will be given stock. My point was that we should disregard all normal practice or precedent in the case of widows and children, and deal with them. As to all the others, they are being treated exactly as everybody was treated before.

Mr. Foster: That is not so. This is not the way the matter was treated under the Coal Industry Nationalisation Act. The matter was then dealt with in the way in which we ask the Government to deal with it in this Motion. The Act laid down that the compensation should be based on the value on the date of issue. That is the point of this Debate, and so what the hon. Member says is wrong. Let us analyse what he says about widows and children. He says that he will disregard all precedent. If we are

to assist widows and children there is no need to disregard all precedent because we help them under the National Assistance Act. They are only to be helped in this case if they have suffered an injustice. I come back to the point, which is a moral argument, that by what he has said in the case of widows and children, the hon. Gentleman has recognised the injustice of the position.
The hon. Member for Jarrow, the hon. Member for South Ayrshire and the hon. Member for West Fife (Mr. Gallacher) have said that those who can afford it have to suffer and that they do not mind if they are unfair to those people. I do not believe that hon. Members opposite really believe that. Neither do their constituents, whether they are Socialists, Conservatives or Liberals. The country is united behind certain moral principles, although we are divided into parties and sometimes have very extreme divisions in the House. We think that hon. Members opposite do not always advocate principles which are moral, but that, on the whole, their constituents do. Their constituents believe that it is not right to be unfair to people.
What is the principle here? It is that we think it unfair that when a man has lent £100 and has been promised repayment, he should be repaid with £85. Whether the principle applies to a few shillings or to a few pounds it is unfair. I can quite understand the indignation of the hon. Member for South Ayrshire that any working man voted Conservative. It always annoys the Socialist Party that a large number of trade unionists and working men vote Conservative. It always gets under their skins. I can understand the hon. Member for South Ayrshire being annoyed at that—

Mr. Emrys Hughes: I was amused.

Mr. Gallacher: Talking about gas, if I invested £100 in a gas company and over a period of years drew £500 out of the company in interest and then got £85 for my original investment, should I not be very lucky?

Mr. Pickthorn: The hon. Member would be a fairy prince.

Mr. Foster: This is a case where certain people have lent companies some money. Under the Gas Act the money is being


turned into stock. This concerns not only shareholders but also people who lent money.

Mr. Gallacher: It is a gamble.

Mr. Foster: From one point of view it is a gamble for a widow with £10 who lends it to a gas company, but the lady may be too old to work and may be doing this with some savings. I do not think that hon. Gentlemen opposite are against savings as such; I always believed they were in favour of them. Perhaps she saves £10 and lends it to a gas company. First of all, along comes "Let us Face the Future," which says that compensation will be on a fair basis. Now "fair" is a well-understood moral principle, and that is what I am talking about, the moral principle. She lends the money and instead of getting back £10, she gets £8 10s.

Mr. Fernyhough: Does the hon. Member believe that to be true?

Mr. Foster: Of course, it is true. The hon. Gentleman knows where I sit for because he was the candidate there at one time and then went to Jarrow. I can assure him that the people in my division would not have selected him as Socialist candidate unless he had been actuated by moral principles. It is quite true that money was lent to gas companies and turned into loans. One instance was in 1949 when the Mossley and Saddleworth Gas Company needed money to extend their works. Nationalisation made people unwilling to lend money so the company borrowed a total of £75,000.

Sir William Darling: It did not make any impression on the hon. Gentleman.

Mr. Foster: No, apparently it did not; that is why I am repeating it. Now that money is repaid in depreciated stock. Is that fair? Ask any elector, any worker, any housewife if that is fair and they will say that it is not. I do not believe they go in for that revolutionary jargon, that it is a good thing to be unfair to those who are better off. That people who are rich have done injustices in the past, we all acknowledge. The Government commit injustices today. Unfortunately, it is part of human nature that injustices are committed, but it is no answer for the other side to do the same

thing in return. That cannot be right morally, and I do not believe that the hon. Member for South Ayrshire is really in favour of committing injustice. The hon. Member said that the shareholders wanted some more loot. Can he tell me, if it is loot, why the Socialist Government put a Clause in the Coal Nationalisation Bill recognising the principle that compensation should be fair?

Mr. Emrys Hughes: As the hon. Member asks me a question, I believe the Government has learned by experience and, as a result of realising the amount of loot that has been paid in compensation for coalmines, they have decided on a more economical method.

Mr. Foster: Look what that means. It means that the Government learned by experience that to be fair they had to pay out more compensation than they want to pay.

The Financial Secretary to the Treasury (Mr. Glenvil Hall): May I interrupt the hon. Gentleman to inform him that Saddleworth is in my division and that I have not had a single letter or complaint from any resident within that area.

Mr. Foster: Obviously the reason why they have not complained to the hon. Member for Jarrow or to the Financial Secretary is that it would do no good. If now the Socialists are to count by the number of letters of complaint, everybody would have to complain to every Socialist hon. Member every time so that they would not be able to say in the House, "I sit for such and such a division and I did not get a letter of complaint from anyone." That seems to me to be ridiculous.

Mr. Glenvil Hall: I only intervened because not only the hon. Member for Northwich (Mr. J. Foster) but the hon. and gallant Member who spoke earlier quoted that case, and only that case, as an instance of the injustice that is being done. All I said was that although most of the area covered is in my division, I have not had a single complaint.

Mr. Foster: We are quite capable of judging whether a thing is fair or unfair with our intellects and consciences and hearts; are we to judge it by the number of letters of complaint that come in? Does the right hon. Gentleman really


believe that when one says a thing is fair, it is proved by saying that there has been no letter of complaint? He cannot mean that. I appeal to hon. Gentlemen opposite: Is a thing fair because no letter of complaint has been received? Obviously not. I can see why there are all these interruptions, because people do not like a moral argument. [Laughter.] It is true. Hon. Gentlemen opposite laugh at a moral argument but they are laughing out of nervousness, because their consciences are pricking them. When a thing is unfair, it is unfair to everybody, and it is just as unfair to somebody who is well off. Hon. Members said that people who lent the gasworks £100 could well afford it; they said that if somebody was rich, they would screw him, and so on.

Dr. Morgan: Screwing the worker—Tate sugar.

Mr. Foster: The hon. Gentleman was not doing justice to himself. He was saying that because workers had received injustice, he was justified in returning it. That is not a sound moral principle.

Dr. Morgan: It is your system.

Mr. Foster: It is a system he may defend but I think his electors will not like it when they see that in the House of Commons he said that it was justifiable to commit an injustice against somebody, because one had been done to them. That is not right morally.
What has happened in this case? Hon. Gentlemen opposite, speaking on the nationalised industries when they were taken over, said there would be fair compensation. Obviously fair compensation is only fair at the time it is given. One cannot give a man fair compensation for taking away his house, or his stock or his ass, or anything that is his, and say it is fair compensation because at the date it is paid it is at the rate of 80 per cent., 50 per cent. or 1 per cent. of the value. If this is reduced to an absurdity it means that if on the date of issue, Gas Stock was worth nothing, that would be fair compensation and, going up the scale, it would be equally fair compensation if on the date of issue something worth £100 was worth only £85.

Mr. Gallacher: What if it were worth £150?

Mr. Foster: I rather agree that if it is fair one way, it is fair the other. I agree that if the Treasury had issued it at a lower price to give 100 at the date of issue, that would seem to me to be quite fair. I am only speaking for myself, and stating it as a moral principle, when I say that. What the hon. Member for Wimbledon said was quite true as a sound moral principle. That is what I liked about the interruption of the hon. Member for Wimbledon, that he was applying the right moral criteria. I would be interested to know how he could justify giving to a man who had lost £100 something worth £85 at the date of issue. It is no good the Minister going on about income, because some people, when they have lost an asset which produced a certain income, have to realise it if they are in financial straits. Therefore we have to be fair in two ways. We must give them an equivalent income and also a capital asset worth the same amount. It is no good giving a capital asset which is worth nothing in order to produce the same income. That is not fair.
Let us test this by what would happen in the criminal courts. The Prevention of Fraud Act, 1939, makes it a crime for somebody to give a misleading promise or a false hope with a view to a person acquiring stock. If these statements had been made not in a privileged position in the capacity as spokesman for the Government, one would have had a case to say that a man who promises somebody £100, takes over the asset and then gives him something else worth £85, has committed a fraud. That is what we meant on this side by saying it was a fraud.
Let me say why it is a fraud. A fraud is something which is contrary to the moral law, by which, when somebody is compensated, he must be compensated fairly. I appeal to hon. Gentlemen opposite to examine their consciences to see whether they believe that. It does not matter whether it is a widow or a rich person who is being given something which is worth less than the thing which is taken away from them.

Mr. Gallacher: The hon. Member has raised an important point about the position regarding the courts and the issue of stock. He must know that a Bill was passed some time ago giving the subject the right to take a case


against the King and, therefore, against the King's Ministers. Would the hon. and learned Member not consider taking a case into court against a Minister to see how he gets on?

Mr. Foster: Unfortunately, there are some frauds by the Government which are protected by law and in respect of which the Crown Proceedings Act is of no avail. The answer to the hon. Member is that that case would fail. But the fact that such a case would fail does not make this any less a fraud. This is not a case where fraud by the Government can be sued under the Crown Proceedings Act, which is hedged in by a lot of qualifications and limitations.
I come back to the Coal Industry Nationalisation Act, the terms of which hon. Members opposite have, I think, forgotten. That Act says that the amount of Government stock to be issued has to be of a value equal at the date of issue to the amount to be satisfied. That was fair, and was accepted as fair in the Debates and in Standing Committee; and if it was fair for the coal shareholders and creditors, it is fair in the case of gas. The fact that hon. Gentlemen opposite realise it is unfair is shown by their speeches, for when something is unfair their policy is to attack the other side. Instead of saying, "I regard it as fair, for the following reasons," it is very natural for the hon. Members for Jarrow and for South Ayrshire to say, "Ah, but look at what has happened in the past. Look how unfairly we have been treated. Because you have been unfair, we can be unfair." That is their argument. Hon. Gentlemen opposite cannot really subscribe to these moral principles. In the face of the principles for which we all stand, on both sides of the House, they cannot say that it is right to be unfair to somebody because the other side has been unfair to them.
I come to my last point: that the Minister, when pressed about this procedure, said that it was in accordance with the Gas Act. That is true only up to a point. The Gas Act, it is true, uses the words "at the vesting date" which is the unfair part, but if the Minister thinks it is unfair he can correct it; he can issue a short-term dated stock. In his answer to a Question by the hon. Baronet the Member for Sutton Coldfield (Sir J. Mellor) he said that he could give

a short-term dated stock if he wanted to. Let us test what would happen if he did so. Instead of losing £15 out of £100 in a short-term dated stock, the loss would perhaps be £1 or £2 or even nothing at all. If the Minister wanted to make certain that there would be no unjustified profit, he could put in a Clause giving the Government the right to buy back the stock at par. Surely, he has it in his power to redress the unfairness. He cannot merely fall back upon the Gas Act and say, "I cannot do anything. This has been fully ventilated before." He has a remedy in his own hands if he thinks the compensation is unfair.
I hope that subsequent speeches of hon. Members opposite do not start by saying, "The rich have ground down the faces of the poor: therefore, we shall do the same thing back again." That is not right morally. Let hon. Gentlemen opposite keep in front of them the principle as to what is fair. Let them direct their arguments to saying why they think that these proposals are fair in the sense of what is morally fair.

5.55 p.m.

Mr. Pargiter: It is peculiar to hear arguments of morality introduced into this Debate. I was interested also to hear the questions of gas and coal compensation being compared, for the methods of dealing with the two industries are entirely different. That being so it is not possible to arrive at a basis of comparison. In the case of Gas Stock it was clearly established that a person is entitled at a given date to £100 for £100 worth of stock. If before it is paid to them those concerned want to follow the normal machinations of the money market and the price of the stock goes up or down they must accept what the money market provides.
Had there been collusion between hon. Members opposite and the City, the Debate would have fitted very conveniently. No doubt a number of people in the City who have been busily engaged in depressing Government stocks would have said immediately afterwards, "Look how unfair this is: a person can get only £85 or £95 for £100 worth of stock." If the Government were to give way on such a point, it would be a very good precedent for people in the City to continue to depress Government stock on the


basis that all the time they were doing so, the Government must alter their terms of compensation. If that is the argument that is being used we may as well know that that is the sort of argument that hon. Members opposite want; that they can rig the money market from time to time in order to squeeze more compensation out of the nationalised industries.

Sir W. Darling: The hon. Member said that the City had depressed stocks. Would I be correct in saying that the Chancellor of the Exchequer had also depressed stocks?

Mr. Pargiter: No. The Chancellor has no object in depressing stocks.

Sir W. Darling: But he does.

Mr. Pargiter: The Chancellor goes into the market and the nation borrows money and undertakes to repay it in dated stocks at a certain time. People know precisely the terms upon which they accept the stock. Operators in the market concerned with depressing stocks hope to make a profit as a result of their speculations.
I am sorry that any Government stock is subject to City manipulation. I feel quite frankly that a person who lends £100 to the Government at any time should get £100 back—

Sir W. Darling: Not from the Socialist Government.

Mr. Pargiter: —and not £105, as might somebody who had gambled to make money out of it. By having accepted the principles of the money market, which hon. Members opposite so strongly support, they must take the good with the bad. In this particular case, it happens that at present things are not too good. Had they been good there would have been no cries from the other side about the price of issue of Gas Stock.
Then there is the question of how badly the workers fare. I have not heard any complaints about the large number of workers who have been invited to invest in various undertakings from time to time. Hon. Members opposite will probably remember the case of Vickers in the immediate post-war period of 1918 to 1920, when people were invited to

invest in that company at very inflated prices. Those prices came down by half. The same workers fell out of work and, having nothing on which to exist, had to sell their stocks at the price they could get. Now, of course, the money is back where it originally belonged and Vickers are very properly compensating the new owners for what the other people lost, but I have heard no screams from the other side about what the workers lost in the intervening period. We need to be quite clear, therefore, on what happens when stock is invested. Anyone who invests takes the risk of that investment.
The hon. Member for Altrincham and Sale (Mr. Erroll) referred to the position of the creditor and people who supply new plant and equipment to a company merely out of goodness of heart, and who have been prepared to wait for their money. Very often the provision of machinery and so on, in this way is all part of the general scheme. Somebody says, "You take my equipment. That will be all right; I shall not want the money." The company, instead of going to the bank or elsewhere, borrow the money from the people who supply the equipment, as a result of which those suppliers eliminate the competition which they might otherwise face.
Very often when it gets to the stage of the money being due, the company will say, "Do you want this money back, or can it continue?" And often they do not want it back and it continues and it is usually a question of negotiation as to when and where it shall be paid back. There is always the possibility of the' undertaking "going broke," in which case something much more depreciated than the present value of Gas Stock will be paid.
I cannot see that the Government can concede anything on this. It was decided that 3 per cent. was a fair rate of interest and, in spite of what hon. Members opposite think, hon. Members on this side of the House still think 3 per cent. a fair and good rate of interest to pay. The money ought still to be worth £100 at 3 per cent. interest and every effort ought to be made by the Government to maintain the 3 per cent. rate, or a lower rate and not to be bamboozled into recognising higher rates of interest than they have agreed give a fair and equitable return.
I hope my right hon. Friend will resist the Motion and accept the position which has been very fairly stated. The Government undertook to pay at a given time a given sum and, obviously, the Government will pay that sum. The terms have been settled. The City do not like it and are gambling in stocks which ought not to be gambled in. There is no particular reason why Gas Stock should be depressed, except as a concerted move generally to depress stocks of the Government in order to create as much trouble as possible.

6.3 p.m.

Lieut.-Colonel Elliot: The Debate has been rather interesting in that all hon. Members opposite waited until they were given the lead by the Communist Party and then, of course, fell in behind him because, of course—

Mr. Pargiter: I must say that I am unable to agree with the right hon. and gallant Gentleman that I follow the Communist Party. I thought the Communist Party lead was confiscation without compensation.

Lieut.-Colonel Elliot: The point is that the hon. Member for Spelthorne (Mr. Pargiter) was careful not to intervene until the Communist Party led off. It was interesting to note, and, of course, he was followed by the hon. Member for South Ayrshire (Mr. Emrys Hughes), who took almost as strong a line. That is where hon. Members opposite find themselves in great difficulty. Their natural instincts are for payment of no compensation at all—[HON. MEMBERS: "No."]—for payment of no compensation at all—and where they are in a dilemma is whether any compensation should be paid and, if so, how much?
The hon. Member for West Fife (Mr. Gallacher)—and I respect him for it—comes out frankly and says no compensation should be paid and the hon. Member for South Ayrshire says that if it is paid it should be paid in bonds which cannot be cashed until after the emergency and asks whether the Government would subscribe to that or whether we on this side of the House would subscribe to it. If the Government would accept such bonds in payment of the demands they make on the individual, I think everyone on this side of the House would

accept it. Does the hon. Member also suggest that the Government should accept those bonds when they make demands on individuals in respect of Death Duties and the like? It would be interesting to know if he has worked it out as far as that.
Hon. Members opposite are in the difficulty of defending a flagrant injustice—the payment of a sum less than they said was just in an Act of Parliament. That is a very interesting proposal and there are a good many riddles in it. The hon. Member for Spelthorne went as far as to say that he did not think that Government stocks should be dealt with on the Stock Exchange at all and other hon. Members have said the same. They cannot have listened to the lyrical eulogies of the Stock Exchange, poured out in the Gas Committee day after day, week after week and month after month, by the Minister, the Financial Secretary to the Treasury and every hon. Member who spoke on the Government side. They were the people who held up the Stock Exchange as a high and shining example of fairness and justice. I have dozens of quotations here, but I do not wish to detain the House with them. I could read a great many of them. The Minister will not deny that they said the Stock Exchange was the body to make valuations and they described it as a great, a staggering, example of fair dealings. Now some hon. Members say that in their view it is a great pity that the Stock Exchange should ever be allowed to tamper with Government stocks at all.
We are in fact debating something a little wider than compensation to individual members of the community who may or may not have suffered injustice in this particular case. We are debating a principle, as my hon. Friend the Member for Northwich (Mr. J. Foster) said in a brilliant speech. The difficulty was seen by newspapers such as "The Times," which is certainly willing to give the utmost latitude to hon. and right hon. Gentlemen opposite.

Mr. Harrison: We have not noticed it.

Lieut.-Colonel Elliot: The utmost latitude. They said that the present state of affairs, as everybody admits, is anomalous. The anomaly is not merely that payment now is lower than the payment which hon. Members thought


right when they, not we, passed this Act, but it is capriciously unjust in that in certain places certain people coming in for compensation at certain periods got higher payments than other people coming in at other periods. "The Times" said:
This state of affairs has been defended from the Government's point of view on two grounds. First, it is argued that the actual income and redemption rights attaching to the Gas Stock are unchanged. This would be an admirable argument if compensation had in fact been assessed in terms of income. But it was not; it was assessed in terms of capital value. Secondly, the Government say, if market prices had risen instead of falling, and compensation had been reduced in each case proportionately to the higher price of Gas Stock at the date of valuation, there would have been bitter complaint.
When arguing this in Committee we put before the Minister that we were perfectly prepared to take the position in which there would be neither a rise or fall. We should certainly stand by that position because that was the offer we made to the Minister at the time. But he showed no signs of accepting it. "The Times" says:
There would be no complaint if the Government adjusted compensation each way, upwards or downwards, to the value of the compensation stock at the date of valuation.
"The Times" goes on to say:
Payment of compensation in stock instead of in cash was always a mistake.
And it ends:
When the system reaches the point of giving expropriated holders something which is worth less than nine-tenths of their assessed compensation at the time of valuation (which is also the first opportunity for sale), it is time that something was done to recognise the mistake and rectify it.
That brings out the point, which is the answer to the hon. Member for Spelthorne when he quoted the case of certain persons who he said had been invited to subscribe to Vickers. The people who get new Gas Stock are not invited to accept it; they are compelled to take it. There is a great difference. The Government do not say "We invite you to take this stock"; they say, "We compel you to take this stock." They remove from their owners the stocks which those owners were perfectly willing to retain without asking for any of these complicated financial transactions to which the hon. Member for South Ayrshire takes such great exception. It was the Govern-

ment who entered upon these transtions; it is by the will of the Government and hon. Members opposite that they are taking place. They are the people who made these transactions. The hon. Member for South Ayrshire voted for these transactions; he made them; he is the man responsible.

Mr. Emrys Hughes: On all occasions whenever possible I have protested in this House against the over-generous treatment of colliery shareholders.

Lieut.-Colonel Elliot: The hon. Gentleman has protested but he has never divided against a single nationalisation Measure. I await the time when he will do so. These are his transactions. These are the transactions which have got him and the House into the difficulty in which the House is today.
As I say, the matter was discussed at some length in the Committee, and there the Financial Secretary to the Treasury had the temerity to assert that it was a good and justifiable thing that payment should be made in this stock and should be made at a lower rate than securities which the owners held, because, he said, they were now being given a gilt edged security. The gilt on these securities has become a little tarnished since that time.
The Minister went even further. My hon. Friend the Member for Northwich quoted the Companies Act, under which anybody inducing people to subscribe by means of a misleading statement was liable to seven years' "hard." I will give the Minister an example of a statement which I think any court would regard as misleading had it not been made in a privileged place. I refer to his statement:
In effect, the stockholders are getting, in Government stock, the cash value of their securities. If they wish, they can, of course, hold on to that Government guaranteed stock, but there is no obligation on them to do so. They can sell it if they wish, and certainly not at a large loss, and reinvest in something which has a higher yield."—[OFFICIAL REPORT, Standing Committee D, 22nd April, 1948; c. 834.]
Of course, the right hon. Gentleman may say, "It depends what you mean by a large loss." I think that until the reign of the Chancellor of the Duchy of Lancaster at the Treasury a loss of 10 points in gilt-edged securities would have been regarded anywhere in the world as a pretty large loss.

Mr. Glenvil Hall: Look at the price of local loans before the war under Tory Governments.

Lieut.-Colonel Elliot: Let us say then the fall in a matter of months, in a matter of weeks or in a matter of days. Or perhaps the Financial Secretary would like to claim the credit for the present Chancellor of the Exchequer. I do not think that there is any parallel anywhere for the slide which has taken place in gilt-edged securities during the period of the issuing of this stock. That is what has led to these difficulties.

Mr. Glenvil Hall: The right hon. and gallant Gentleman is not really asking the House and the country to believe that my right hon. and learned Friend is responsible for that? He talked about the gilt coming off these securities. The gilt is off the patriotism of hon. and right hon. Gentlemen and their friends in the City, who will stop at nothing in order to discredit this Government.

Lieut.-Colonel Elliot: It is easy to see two things. The first is that the Financial Secretary to the Treasury is very rattled. The second is that the General Election is getting very close indeed. Of course, the Financial Secretary and the Minister suffer greatly because they continually take wrong advice. They are proffered advice by the former Chancellor of the Exchequer, and so foolish are they, so blind to all considerations of probability, that they continue to accept this advice.
The right hon. Gentleman was no doubt influenced by an article which the ex-Chancellor of the Exchequer contributed to the popular Press. He made exactly the same accusation as the Financial Secretary has done, that this fall in Government securities was due not to Government extravagance, not to lack of any international confidence; no, it was entirely due to Tories and to the Stock Exchange, the same Stock Exchange which he was holding up a few speeches previously as the paragon of all the virtues. The ex-Chancellor of the Exchequer said that the
boys in the City have been at it again. My aim while Chancellor of the Exchequer was to establish 2½ per cent. … as the maximum long-term rate of all Government securities. This shocked large sections of the City, … who carried out a great propaganda against this policy.

The right hon. Gentleman neglected entirely the statement which was made by my hon. Friend the Member for Scarborough and Whitby (Mr. Spearman), who pointed out that under present conditions interest rates were almost bound to rise. That was pointed out at the time by people such as the Federal Reserve authorities of the United States, who said that the forces responsible for the rise would probably continue, certainly if demand and production should continue "at the past year's high levels." Of course, that does not matter in the least to the Financial Secretary to the Treasury so long as he can get up and make a few wild accusations against "people in the City who would stop at nothing to lower the credit of this Government." He considers that up to the Election he is getting away with it all right.

Dr. Morgan: It is quite true.

Lieut.-Colonel Elliot: In that case the right hon. Gentleman ought to stop his right hon. Friend and others of the party opposite from praising these gentlemen in the City when they wish to take a particular judgment of the value of Gas Stock on the day of vesting. I could quote many speeches in praise of the Stock Exchange which I should hesitate to make myself. I have not the same slavish adulation for the Stock Exchange as has the right hon. Gentleman.
We are here dealing with this particular question of Gas Stock compensation. The compensatory rights of proprietors of one kind or another was discussed in the Committee. The definite pledge was made by the Minister that anyone getting this stock would be able to realise it at no great loss and re-invest the proceeds if he wished in some other security. I say that that pledge has been broken. This is a matter of the Minister's personal honour. He gave a pledge which he has broken, and this appears to be justified by him in practice and to be justified this evening to the House in debate.
The capricious results of the breaking of this pledge have been very severe indeed. Some slices of Gas Stock were issued when that stock was standing at par, and certain areas got away with the compensation then. Instances include Harrogate, Cheltenham, and Bristol. Let us now consider some of the places which


have been compensated at a very much lower rate—Barnet, Swindon, Hartlepool and Blyth. We shall tell these places that the Minister thinks that it is perfectly just to compensate Harrogate, Cheltenham and Bristol at £100 and to compensate Swindon, Hartlepool, Blyth, Taunton, Swansea, Cannock and Spenny-moor at £88⅛. The Government will have some difficulty in explaining that away—especially when we point out, let us say, that though Houghton-le-Spring was compensated when the price was 90, Brighton, Eastbourne, and Exeter were compensated at 94⅛. And the Gas Light and Coke, the greatest of them all, was compensated when compensation was down to 88⅛.
The Financial Secretary says that people will stop at nothing to talk down the credit of this Government. It is he who is stopping at nothing to talk down the credit of this Government. Deeds speak louder than words. If that had been done by a South American Republic, his criticism would have been loud. No-one would have been more bitter in his complaint against it than the right hon. Gentleman. Nobody would have denounced the "rumba" finance of South America more vehemently than the right hon. Gentleman who is sitting there and carrying out the same thing here. That is what brings the pound down. That is the sort of thing that lowers the international credit of this country. While hon. Members are doing their utmost to induce capitalists from across the Atlantic to invest in this country, they are saying, "Invest, and then we shall take over these companies in which you have invested, and then we shall pay you at a rate which may vary from 100 to 88 according to the whim of the market in gilt-edged at the time." That, I think, is a poor inducement to anybody. And then they have the insolence to say that we are the people who are running down the pound.
The Chancellor of the Exchequer: s hawking pounds on Broadway at a cut rate to his own pegged sterling; and he did not know whether he was doing so or not, until he was challenged from this side of the House. What more could anyone do to talk down the pound than to take an office on Broadway and hawk pounds at a depreciated rate there? This

is the man who accuses us of depreciating the pound. If somebody in the City had done that, if some of those magnates whom he speaks about had done that, who then so eloquent as the Financial Secretary to the Treasury—aye, and the Chancellor of the Exchequer? To take an office on Broadway and hawk English pound notes at a discount is a patriotic deed when done by Socialists and by the nationalised transport system, but a scandalous offence if tried by anybody engaged in private enterprise. We can leave the talking down of the pound to those who are talking it down, because they are talking it down all too often just now, by their deeds as well as by their words.
We say that the proposals which have been brought forward by the Government are not satisfactory. For the House to vote compensation at 100 and for the Government then to issue compensation for £50 million of gas securities when the market for the compensation stocks was £90, and to say, "I am giving you £100 for this "—when anybody can walk down the street and buy the same compensation stock for £90—is neither common sense nor decency. I say very definitely that unless the Government can put up a much better case than they have so far, they will lie under the very great stigma of having gravely depreciated the credit of this country.

Mr. Gallacher: In whose eyes?

Lieut.-Colonel Elliot: In the eyes of the men from whom they are trying to borrow money, in the eyes of the rest of the world. I will not object to them being criminals, but I do object to them also being fools. To depreciate the credit of this country and then try to borrow money as well seems to me a combination of both. I do not blame the hon. Member for West Fife. He would away with all these things. He wishes to transfer his whole allegiance from across the Atlantic to the great open spaces of the Soviet Union. He is at least consistent. But hon. Members opposite are the people who are wishing for investments here from the United States, who are wishing for the support of the capitalist of other countries, but who are doing their utmost to make sure that the credit on which they rely at home will be very shaky indeed.
As I say, the arguments brought forward today were led by the hon. Member


for West Fife, and led by him along lines which were simple and comprehensive; that is to say, that compensation should not be paid. The arguments brought by the Government supporters are that compensation should be paid, but paid partially at least in false money. I do not think that is either decent or respectable. Unless the Minister can give stronger reasons than he has given so far, it will certainly be necessary for us to divide the House. If we fail, as we are likely to fail, we shall carry the appeal to a higher court, to the country, and we have no doubt of the answer we shall get from there.

Mr. Gallacher: They will laugh at the right hon. and gallant Gentleman.

6.26 p.m.

The Minister of Fuel and Power (Mr. Gaitskell): The hon. and gallant Member for East Grinstead (Colonel Clarke), who opened this Debate, emphasised that he was putting forward the case for the Opposition in the most moderate and restrained language. He urged me to respond in the same manner. Unfortunately, he does not seem able to carry with him the right hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot) for I have seldom heard such an outburst of indignation and fury. It seemed to me a little synthetic on an occasion when I should have thought it would have been better for us to have rather cool heads.
However much we may disagree on this issue I should have thought we could agree at least that it is rather complicated and perhaps a little technical. There may be moral issues which underlie it. I may be unduly simple about this, but I cannot agree that it is a very straightforward and simple matter. Indeed, we have been accused of being unable to understand a word of it, so there is a reason perhaps for hon. Members opposite to think that it was rather a difficult matter.
The Opposition Motion criticises the arrangements for compensating certain shareholders in gas undertakings. The first question which arises is how this arrangement came to be made. To some extent the criticisms have been directed to the way in which the nationalisation Act has been carried out, and I shall deal with those in a moment or two. I think the House will agree that the main

burden of the criticism has really been directed against the Gas Act itself.
I do not think it is necessary for me to go over at great length exactly what is laid down, but for the sake of clarity I should like briefly to review what were the arrangements for compensation. They were these: that the holders of securities in gas undertakings should receive compensation in British Gas Stock; that the amount of British Gas Stock they received should depend, in the first place, on the value of the securities in the old undertakings on certain dates laid down in the Act, on which incidentally they have an option; and that the amount of British Gas Stock which they received for the value of the shares in 'the old undertaking would depend on the value on vesting date of gilt-edged securities. In other words, the nominal amount of stock to be issued would have to be equal in value on vesting day to the value of the company shares.
The case of unquoted shares has been mentioned several times. The provision in the Act was that the value should be settled in accordance with the same principles, and by negotiation or arbitration. But again the nominal amount of British Gas Stock issued was to be equal to the value of the unquoted shares on vesting date. I shall come in a moment to whether or not that was a good plan, but I wish to emphasise that, it having been laid down in the Act, it followed automatically that if gilt-edged were to rise after vesting, or before the value of some of these unquoted stocks had been settled, then the holders would have a capital gain.
It followed equally that if gilt-edged were to fall, they would have a capital loss. I think we can agree on that. That was perfectly well known. It was plain to everybody who read the Act. Presumably at least the advisers of the shareholders had read the Act so that they were aware of the position.

Mr. Pickthorn: Is it not true that the Gas Council could at once have altered the conditions of issue of their stock? If the thing had run the other way, there was no moment at which the Gas Council could not have stopped that by altering the terms of issue.

Mr. Gaitskell: I shall come to that later. I think that it will be agreed that,


given what was laid down in the Act, then clearly the position was that if gilt-edged went up the shareholders gained and if gilt edged went down they lost. Clearly, that was to be expected because it had also happened in the case of electricity and transport; but in this case the amount of unquoted shares was more so that gas was in a slightly different position. However, there was this risk that gilt-edged might have gone either way.
I should like to make it plain without going into the question of what the future prospects of gilt-edged might be—that would be quite outside my sphere to consider that, of course, the Government had no responsibility for the course of gilt-edged prices since that date. [Interruption.] I am surprised that hon. Members question that. Do they suggest that the Government must be fully responsible for the level of prices in gilt-edged markets? They certainly have not taken that view up to now.

Mr. Drayson: The Minister will agree that gilt-edged prices reflect the confidence which the holders have in the Government?

Mr. Gaitskell: If that is the case, then they did not have very much confidence in Conservative Governments between the wars.
Before I turn to the main issue, I wish to refer to one or two criticisms of the way in which the Act has been administered. The hon. and gallant Member for East Grinstead (Colonel Clarke) criticised the delay. I really do not think that that is a fair criticism. In point of fact, up to now, as the hon. Member for Scarborough and Whitby (Mr. Spearman) mentioned, we have, practically speaking, completed the whole of the valuation of the shares. There are, I think, £15 million left to be valued out of £180 million. The time taken does not seem to me to have been very excessive. I know that the financial Press said when the British Gas Stock issue was made on 1st May, that it would take another year to get the values settled. In so far as we have not gone faster, I must say that it is not due to any failure on the part of the Ministry. We have found that the representatives of the stockholders have not displayed any particular eagerness to

open negotiations. In fact, there has been a certain tendency to wait and see what the other man got. Again and again we have had to take the initiative in order to get the matter settled.
There was also a reference by the hon. and gallant Member for East Grinstead to the regulations regarding arbitration. It so happens that no single case has yet been referred to arbitration. There we certainly have not lost any speed.

Colonel Clarke: Because they were rather afraid of further delay.

Mr. Gaitskell: No, I do not think that is the case. The hon. and gallant Gentleman was good enough to say that my two officials concerned were particularly able. I think that it would also be said by those who have dealings with them that they were also fair-minded. In the main, it has not been necessary to go to arbitration for that reason, just as it was not necessary—except I think in one case—with electricity stocks.
There was another point about the position of creditors. I am a little surprised that the Opposition should lay so much emphasis on this matter. I suppose they know that the issue here is that when a person has a loan, which may be a mortgage or a debenture, there is liable to be some dispute as to the category in which it should be placed. Obviously, as it has turned out, it is more attractive for the insurance companies—and I think they are mostly insurance companies—and their creditors to have their loan treated as a mortgage rather than as a debenture. But this is a question of the interpretation of the Act. In the one case the hon. and gallant Member mentioned—I think it was Mossley and Saddleworth—I understand that the matter has not yet been settled and that the question whether it is a debenture or a mortgage is under discussion.
There was also reference to the position of co-partners. We have always taken the view that on the question of compensation there was no case for making any distinction between co-partners and other holders of securities. Unlike the normal stockholder, as a rule copartners have not been able to dispose of their holdings when they wished. Generally speaking, co-partners did not obtain full control over their holdings until they retired or left the company. The second


point is that, as co-partnership schemes have been extended and may go on until 1951, the restrictions on the old gas stocks attach to the compensation stock so long as the schemes continue in their present form. Therefore, by reason of the fact that the co-partnership schemes are going on, they are bound inevitably to hold on to the compensation stock. As a matter of fact, I would say that they were primarily interested in income which is not affected by the change in gilt-edged prices, and therefore I do not think there is any special grievance there.
Having disposed of these points of criticism of the way in which the Act has been administered, I now turn to the main issue. I think we can agree that the real basis of the complaint of the Opposition is simply that the gilt-edged market has fallen. That is the reason, they argue, for making a change now. I am bound to put this point to them. Granted that the 1948 Gas Act had been passed and gilt-edged had risen, would the Opposition have come down to the House with a Motion proposing that the stockholders should pay something back to the Government?

Colonel Clarke: The right hon. Gentleman will remember that in the Standing Committee we suggested machinery whereby the market should be stabilised for six months. The method suggested was that the shares should be repayable at the end of six months at par. The Minister should realise that we made a contribution which would have met the position had there been a rise or a fall.

Mr. Gaitskell: What the Opposition proposed, either in Standing Committee or on re-committal, was that the holders should have an option of cash which, of course, they would have taken if gilt-edged had fallen but which they would not have taken if gilt-edged had risen. That was the case of "Heads I win; tails you lose" which the Government were not prepared to accept. What the Opposition did not propose in Standing Committee, and what has been suggested in several speeches today, is that the same procedure should have been applied as was applied under the Coal Act. I do not want to go any further into what might have been suggested during the Committee stage of the Gas Bill.
My point is that granted that gilt-edged had risen, what would the Opposition have done? I presume that they are serious in asking me to make some changes, and one must face the issue of what the Opposition would have done if gilt-edged had risen. I cannot believe that they would have come down here and made any such proposal as that I have suggested. Indeed, had the Government come to the House because of a rise in gilt-edged and made a proposal that we should take away some of the compensation due to these people, one can imagine the kind of language which the right hon. and gallant Gentleman the Member for Scottish Universities would have used. "Socialist swindle," somebody described it, and that phrase would pale into insignificance compared with the words that would then be used

Mr. Spearman: The right hon. Gentleman is behaving rather like the judge who said that justice in his country was excellent, because, although it was true that 12 men were hanged who were not guilty, there were also 12 guilty men unhanged who ought to have been hanged. I cannot see what fairness there is in paying in certain cases 90 where in other cases the figure is 101.

Mr. Gaitskell: I want to explain it to the hon. Gentleman, and I regard this as a serious matter and not a debating point. When the Gas Act was passed, as we have agreed, there was this possibility; either that gilt-edged prices would rise or that they would fall. It was a possibility well known to the holders of the shares. It is a most dangerous principle to come down to the House and ask that, because gilt-edged had moved in a particular direction, there should therefore be some change of a retrospective character so far as the Act is concerned, when everybody had been behaving in the expectation that the Act had laid down the basis for compensation.
Indeed, it is a rather dangerous proposal that we should make particular adjustments when gilt-edged changes. I think some of my hon. Friends might suggest that, in view of the fact that receipts on British Railways, for example, are very much below what was anticipated in 1947, therefore we should take something away from the shareholders of transport. I do not share that view. I


think that, having laid it down in that way in the Act, we must stick to it. We really cannot have it working both ways, and even if it does appear to be slightly against the interests of the shareholders in the one case, it would have been very much more in their interests in the other.

Mr. Gallacher: Is it not the case that the railway shareholders got a substantial rise when the interest rates went up to 3 per cent.?

Mr. Gaitskell: I would prefer not to go further into a discussion of what the railway shareholders got.
Let us examine the further details in this particular case. The total compensation, in round figures, is £180 million, and that will have to be paid. As the hon. Member for Scarborough and Whitby (Mr. Spearman) said, £77 million was paid on or about vesting day, and therefore I can presume that up, to now there has been no complaint so far as these stockholders are concerned. If a stockholder was paid in British Gas Stock on vesting date and he has held it, so far as he is concerned, he is in exactly the same position as a stockholder who was compensated at a later date. He is in the same position as everybody else, now that gilt-edged stocks are lower.

Lieut.-Colonel Elliot: We make no complaint about that, but we are concerned with those who were compensated at below 90.

Mr. Gaitskell: I am glad to have that assurance from the right hon. and gallant Gentleman, because it was not always clear from the other side which group they were concerned with.
Let us consider these other persons, the people who are supposed to have suffered. Nobody is complaining that, under the terms of the Act, the value placed upon their shares is unfair, and it is also clear that the nominal amount of British Gas Stock issue is correct, assuming that the value of the shares is fair. Moreover, their income is unaffected, as for each £100 of stock, the stockholder continues to receive his £3 per year. The only complaint, therefore, is that interest rates have risen. This is a complaint against the gilt-edged market, but is it not obvious that those stockholders who had no intention of selling their shares, because they

had no cause for complaint at all, are in no different position from any other holder of gilt-edged? If they wanted to sell, on the other hand, why should they not sell? They did not have to wait for vesting day or conversion day. In fact, a very large number of them did sell. The hon. Member for Scarborough and Whitby has said that there are great difficulties in disposing of unquoted shares. That is true, because the market is a narrow one, but that always was the case, and anybody holding unquoted shares found that difficulty in selling, nationalisation or not.

Mr. Spearman: The holders of these shares were receiving a larger rate of interest. They may have better securities, but they were in fact moved away from a yield of 6, 7 or 8 per cent. towajds 3 per cent., and, whereas before, they did not want to sell at the high yield, when they, found themselves in something which meant a lower rate of interest, with a stock they had not wanted, many of them really did want to sell.

Mr. Gaitskell: I would not say that none wanted to sell in any circumstances, but I do say that the holder of these unquoted shares was the type of man who was not in the habit of selling. It is true that he gets a lower income, but it is a much more secure income, and I do not think there is very much argument there.
Finally, there is the point that, if they had sold, what would they have done? No doubt, for the most part, if we follow out the hon. Gentleman's argument, they would have realised the value of the shares and put it into some other industrials, which afforded a yield something like the stocks which they held before. Industrial equity stocks have also fallen by just about the same amount in the last six months.

Mr. Spearman: I gave the right hon. Gentleman two instances, one where shareholders sold their stock and bought Government stock of early redemption date, and the other where he repaid a bank loan. How would the hon. Gentleman deal with these particular cases in his proposals?

Mr. Gaitskell: Obviously, there are all sorts of permutations and combinations. I think we would agree that, by and large, they have not lost very much, if anything


at all, because industrial shares have fallen to the same extent. If they now wish to sell, and I am taking the worst cases from my own point of view—the men who are to be compensated at 90 or 88—the man who buys industrials buys them at a lower price and he gels an advantage both in the price of those industrials and in the expectation of a higher yield.
It may have been said that we really ought to have had a different arrangement in the Act, that we should have arranged for the valuation of the shares to be based upon the value of the stock at the date of issue, instead of at the vesting day. There would have been risks involved even there. It would have given the stockholders a definite capital value but an uncertain income and an uncertain amount of nominal capital. I think they would sooner have a certain income and an uncertain capital value than have it the other way round.

Mr. Foster: Would not a short-dated security be the same as an uncertain income—a security relating to one year?

Mr. Gaitskell: It is a very low income. I have argued that taking the matter by and large, there is no strong case for any action. The position was perfectly clear and the stockholders were free to decide whether to sell or not as they wished. I mentioned that a number of them did sell. The estimate is that, since vesting day, there has been a turnover of one-third of all holdings of unquoted securities.
I want now to follow up the proposals of the Opposition in these circumstances and see where we get to. Let us suppose that we were to introduce legislation, as certain hon. Members suggested, to pay the recipients of Gas Stock the difference between the par value and the market value on the date of conversion—the 10 per cent. or 7 per cent. which was the difference between these two. What would it involve? It would mean paying not only those who held their securities throughout, and, precisely for that reason, have no great claim upon us, but it would also mean paying the others who bought gas securities before conversion and perhaps after vesting day. What conceivable reason could there be for paying additional money to people who happened, shall we say, in June or July, or even in

August, to have purchased some of the stocks of these unquoted shares, or, if one likes, the Gas Light and Coke stock which, because of war damage provisions, was not valued until later, and then to have held it as a pure speculation? There can be no case at all for doing that
Meanwhile, what is the position of those who have sold the stock which they had earlier? Obviously, they are not going to get any benefit from a provision of that kind. I must say that if we were to attempt anything of this sort and try to do reasonable justice, we should literally have to examine every transaction to see whether the individual had really suffered any loss—if it be a loss, and, of course, I am not conceding that—and then decide whether he should be compensated. We should have the difficulty of deciding what attitude should be adopted towards the men who had bought gas stocks before the vesting date but after the publication of the Bill when it was perfectly clear what was going to happen. Should they get the extra amount or not? I frankly do not know. It is very doubtful indeed whether there would be any case whatever for that. Therefore, quite apart from anything else, the practicability of the proposals put forward by the Opposition, is really extremely doubtful.
I now come to the other proposal, that, instead of legislation, we should issue shorter dated securities. In answer to a question by the hon. Baronet the Member for Sutton Coldfield (Sir J. Mellor), I gave the reason why shorter dated securities had not been issued, and I do not think he really thought that was a very bad reason. He agreed that, on the whole, public utility stock should be longer dated. I am not asking him to agree to more than that, because I know that he is still anxious that we should issuer shorter dated stocks.
What would be the position if we were to adopt this proposal and discard those principles of sound finance, and say, "We will go in for shorter dated stocks"? In the first place, we should not be avoiding paying out extra money—I must make that clear to the hon. and gallant Member for East Grinstead—because the obvious purpose would be to have a shorter dated stock which would be later redeemed and replaced by longer dated stock at


a higher rate of interest. But that is only by the way.
What should we find if we combined it. as in the Motion, with the provision that the existing gas stock should be exchanged for it at par? Exactly the same difficulties would arise. Any holder of British Gas Stock today would find himself automatically in possession of a stock worth six or seven points higher according to the length of the maturity of the new security. We should, of course, be helping a whole lot of people who happened to come into the market and who bought stock a few days or weeks before, and we would not be helping all those who had, in fact, sold out. Therefore, it seems to me that we come up against precisely the same difficulties.
On the other hand, if we were to adopt the proposal that we should have shorter dated securities just for the remaining issues—in the first place there are only about 7½ per cent. of the total left; £15 million out of £180 million—that would not deal with the problem which hon. Members think is so serious. In the second place, I must say that I think it would be quite wrong, when the market expectations generally have unquestionably been that British Gas Stock 1990–95 would be issued for all these shares as they were converted, to change over and make an issue of a different kind of stock.

Colonel Clarke: My suggestion to meet that difficulty was that it might be practicable to offer to the original allottees of British Gas Stock an option which they could sell if they passed on the stock. It could be sold if the original allotment were not retained.

Mr. Gaitskell: I am afraid that we come up against the same difficulty as before, the practical difficulty of sorting out all the transactions that have taken place and deciding whether anybody is entitled to anything at all. I must make it plain, however, that in following up these proposals—as I think the Opposition are entitled to expect me to do—and indicating how impracticable they are, I am not conceding that if they were practicable we should follow them, because, in my opinion, the criticisms that have been made of the treatment

accorded to gas stock holders are extremely exaggerated.
There is no doubt at all that there is the strongest possible objection to trying to isolate one particular group who happen to be holders of a particular stock from the general movements of the stock markets, and for the Government to come along and do that would, in my opinion, be wholly wrong. I cannot think of a single case where retrospective action of this kind has been taken after an Act of Parliament had been put into force laying down what shareholders were to receive. I must say that I think it holds a most dangerous precedent for all of us, and for that reason, as well as on the grounds that I have explained, I do not think there is really any case of serious hardship here.
Holders have been taking risks in the ordinary way as everybody holding securities takes risks. Some may have sold out in time if they wished to avoid a capital loss, and others may have bought. On the other hand, I cannot see that there is any case for assuming that the present level of gilt edged securities, including British Gas Stock at 90, are going to remain so for ever. I am not going to enter into a discussion with the hon. Member for Scarborough and Whitby as to the possible developments in the gilt edged market. I do not really accept his analysis—it seemed to me far too simple—nor do I accept what some other hon. Member said about lack of confidence in the Government. We have had an interesting and useful Debate which, though rather heated at times, has I think served to clear the air very substantially, but now for all the reasons that I have given I must ask the House quite firmly to reject this Motion.
Question put,
That this House views with deep concern the losses caused to creditors, co-partners and other holders of gas securities by the issue of British Gas Stock at a valuation that bears no relation to its true value at the date of issue, and urges on the Minister the necessity either to ensure the issue of a shorter-dated stock in satisfaction of compensation and making such stock convertible at par with Gas Stock already issued, or by some other method to rectify the present injustice.

The House divided: Ayes, 87; Noes, 234.

Division No. 302.]
AYES
[7.2 p.m.


Amory, D. Heathooar
Harris, H. Wilson (Cambridge Univ)
Prior-Palmer, Brig. O.


Baldwin, A. E
Hogg, Hon. Q.
Roberts, Emrys (Merioneth)


Barlow, Sir J.
Holmes, Sir J. Stanley (Harwich)
Roberts, W. (Cumberland, N.)


Bower, N.
Jeffreys, General Sir G.
Ropner, Col. L.


Braithwaite, Lt.-Cmdr. J. G.
Kendall, W. D.
Ross, Sir R. D. (Londonderry)


Bromley-Davenport, Lt.-Col. W.
Lambert, Hon. G.
Savory, Prof. D. L.


Butcher, H. W.
Langford-Holt, J.
Shepherd, W. S. (Bucklow)


Byers, Frank
Legge-Bourke, Maj. E. A. H
Smiles, Lt.-Col. Sir W


Challen, C
Linstead, H. N.
Spearman, A. C. M.


Clarke, Col. R. S.
Lipson, D. L.
Stanley, Rt. Hon. O.


Conant, Maj. R. J. E
Low, A. R. W.
Stewart, J. Henderson (File, E.)


Crookshank, Capt. Rt. Hon. H. F. C.
Lucas, Major Sir J
Strauss, Henry (English Universities)


Crowder, Capt. John E.
Lucas-Tooth, Sir H.
Studholme, H. G.


Darling, Sir W. Y.
McCorquodale, Rt. Hon. M. S.
Sutcliffe, H.


Dodds-Parker, A. D.
Mackeson, Brig. H. R.
Teeling, William


Donner, P. W.
Macpherson, N. (Dumfries)
Thorp, Brigadier R. A. F.


Dower, Col. A. V. G. (Penrith)
Manningham-Buller, R. E.
Touche, G. C.


Drayson, G. B
Marples, A. E.
Turton, R. H.


Drewe, C.
Marshall, D. (Bodmin)
Wakefield, Sir W. W


Elliot, Lieut.-Col. Rt. Hon. Walter
Medlicott, Brigadier F.
Walker-Smith, D.


Fleming, Sqn.-Ldr. E. L.
Mellor, Sir J.
Webbe, Sir H. (Abbey)


Fletcher, W. (Bury)
Molson, A. H. E.
Wheatley, Colonel M. J. (Dorset, E.)


Foster, J. G. (Northwich)
Mott-Radclyffe, C. E.
Williams, Gerald (Tonbridge)


Fraser, Sir I. (Lonsdale)
Nicholson, G.
Willoughby de Eresby, Lord


Galbraith, Cmdr. T. D. (Pollok)
Noble, Comdr. A. H. P
Winterton, Rt. Hon. Earl


Galbraith, T. G. D. (Hillhead)
Orr-Ewing, I. L.
York, C.


Gammans, L. D.
Pickthorn, K.
Young, Sir A. S. L. (Partick)


George, Lady M. Lloyd (Anglesey)
Pitman, I. J.



Granville, E. (Eye)
Ponsonby, Col. C. E
TELLERS FOR THE AYES:


Grimston, R. V
Prescott, Stanley
Commander Agnew and




Mr. Wingfield Digby.




NOES


Albu, A. H.
Daines, P.
Holman, P.


Allen, A C. (Bosworth)
Dalton, Rt. Hon. H.
Holmes, H. E. (Hemsworrh)


Attewell, H. C.
Davies, Edward (Burslem)
Horabin, T. L.


Austin, H. Lewis
Davies, Haydn (St. Pancras, S. W.)
Houghton, Douglas


Awbery, S. S.
Deer, G.
Hoy, J.


Ayles, W. H.
de Freitas, Geoffrey
Hudson, J. H (Ealing, W)


Ayrton Gould, Mrs B.
Delargy, H. J
Hughes, Emrys (S. Ayr)


Bacon, Miss A
Diamond, J.
Hughes, Hector (Aberdeen, N.)


Balfour, A.
Dodds, N. N.
Hughes, H. D. (W'lverh'pton, W.)


Barstow, P. G.
Driberg, T. E. N.
Hynd, H. (Hackney, C)


Barton, C.
Dumpleton, C. W.
Irving, W. J. (Tottenham, N.)


Battley, J. R.
Ede, Rt. Hon. J. C.
Janner, B.


Bechervaise, A. E.
Edwards, John (Blackburn)
Jenkins, R. H.


Berry H.
Edwards, Rt. Hon. N. (Caerphilly)
Jones, D. T. (Hartlepool)


Beswick, F.
Evans, Albert (Islington, W)
Jones, Elwyn (Plaistow)


Bevan, Rt. Hon. A. (Ebbw Vale)
Evans, E. (Lowestoft)
Jones, P. Asterley (Hitchin)


Bing, G. H. C.
Evans, S. N. (Wednesbury)
Keenan, W.


Binns, J.
Ewart, R.
Kenyan, C.


Blackburn, A. R.
Farthing, W. J
Key, Rt. Hon. C. W


Blyton, W. R.
Fernyhough, E.
Kinghorn, Sqn.-Ldr. E


Bottomley, A. G
Field, Capt. W. J.
Kinley, J.


Bowden, H. W
Fletcher, E. G. M. (Islington, E)
Kirby, B. V


Braddock, Mrs. E. M. (L'pl. Exch'ge)
Foot, M. M.
Lavers, S.


Braddock, T. (Mitcham)
Freeman, J. (Watford)
Lawson, Rt. Hon. J. J.


Bramall, E. A.
Gaitskell, Rt. Hon. H. T. N.
Lee. F. (Hulme)


Brook, D. (Halifax)
Gallacher, W.
Lee, Miss J. (Cannock)


Broughton, Dr. A. D. D.
Ganley, Mrs. C. S.
Levy, B. W.


Brown, George (Belper)
Gibson, C. W.
Lindgren, G. S


Brown, T. J. (Ince)
Gilzean, A
Lipton, Lt.-Col. M


Burden, T. W.
Gordon-Walker, P. C
Logan, D. G.


Burke, W A.
Greenwood, Rt. Hon. A. (Wakefield)
Longden, F.


Butler, H. W. (Hackney, S)
Greenwood, A. W. J. (Heywood)
Lyne, A. W.


Callaghan, James
Grenfell, D. R.
McAdam, W.


Champion, A. J
Grey, C. F.
McEntee, V. La T


Chater, D.
Griffiths, D. (Rother Valley)
MoGhee, H. G.


Chetwynd, G. R.
Griffiths, Rt. Hon. J. (Llanelly)
Mack, J. D.


Cluse, W. S
Guest, Dr. L. Haden
McKay, J. (Wallsend)


Cobb, F. A.
Gunter, R. J.
McLeavy, F.


Collick, P.
Guy, W. H.
MacPherson, Malcolm (Stirling)


Collindridge, F.
Hall, Rt. Hon. Glenvil
Macpherson, T. (Romford)


Collins, V. J.
Hamilton, Lieut.-Col. R
Mallalieu, E. L. (Brigg)


Colman, Miss G. M
Hardman, D. R
Mallalieu, J. P. W. (Huddersfield)


Comyns, Dr. L.
Harrison, J.
Manning, Mrs. L. (Epping)


Corbet, Mrs F. K. (Camb'well, N W.)
Hastings, Dr. Somerville.
Marquand, Rt. Hon. H. A


Corlett, Dr. J.
Henderson, Rt. Hon. A. (Kingswinford)
Mathers, Rt. Hon. George


Cove, W. G.
Herbison, Miss M.
Mellish, R. J.


Crossman, R. H. S
Hewitson, Capt. M
Messer, F.


Daggar, G.
Hobson, C. R
Middleton, Mrs. L







Millington, Wing-Comdr. E. R.
Reeves, J.
Taylor, Dr. S. (Barnet)


Mitchison, G. R.
Reid, T. (Swindon)
Thomas, D. E. (Aberdare)


Monslow, W.
Rhodes, H.
Thomas, Ivor Owen (Wrekin)


Moody, A. S.
Ridealgh, Mrs. M.
Thorneycroft, Harry (Clayton)


Morgan, Dr. H. B
Robens, A.
Tolley, L.


Moyle, A.
Roberts, Goronwy (Caernarvonshire)
Tomlinson, Rt. Hon. G


Murray, J. D.
Robertson, J. J. (Berwick)
Turner-Samuels, M.


Naylor, T. E.
Robinson, Kenneth (St. Pancras, N.)
Vernon, Maj. W. F


Neal, H. (Claycross)
Rogers, G. H. R.
Viant, S. P.


Nichol, Mrs. M. E. (Bradford, N.)
Ross, William (Kilmarnock)
Walker, G. H.


Nicholls, H. R. (Stratford)
Royle, C.
Wallace, G. D. (Chislehurst)


Noel-Baker, Rt. Hon. P. J. (Derby)
Scott-Elliot, W.
Wallace, H. W. (Walthamstow, E.)


Noel-Buxton, Lady
Segal, Dr. S.
Warbey, W. N.


Oldfield, W. H
Shawcross, C. N. (Widnes)
Watkins, T. E.


Orbach, M.
Shawcross, Rt. Hon. Sir H. (St. Helens)
Weitzman, D.


Paling, Rt. Hon. Wilfred (Wentworth)
Silverman, S. S. (Nelson)
Wells, P. L. (Faversham)


Paling, Will T. (Dewsbury)
Simmons, C. J.
Wells, W. T. (Walsall)


Palmer, A. M. F.
Skeffington-Lodge, T. C.
White, H. (Derbyshire, N.E.)


Pannell, T. C.
Skinnard, F. W.
Whiteley, Rt. Hon. W.


Pargiter, G. A.
Smith, H. N. (Nottingham, S.)
Willey, F. T. (Sunderland)


Parker, J.
Smith, S. H. (Hull, S.W.)
Willey, O. G. (Cleveland)


Parkin, B. T.
Snow, J. W.
Williams, W. R. (Heston)


Paton, Mrs. F. (Rushcliffe)
Sorensen, R. W.
Wills, Mrs. E. A.


Paton, J. (Norwich)
Soskice, Rt. Hon. Sir Frank
Woodburn, Rt. Hon. A.


Pearson, A.
Sparks, J. A.
Woods, G. S.


Peart, T. F.
Stewart, Michael (Fulham, E.)
Younger, Hon. Kenneth


Popplewell, E.
Stokes, R. R.
Zilliacus, K.


Porter, E. (Warrington)
Sylvester, G. O.



Porter, G. (Leeds)
Symonds, A. L.
TELLERS FOR THE NOES:


Proctor, W. T.
Taylor, H. B. (Mansfield)
Mr. Hannan and


Pursey, Comdr H
Taylor, R. J. (Morpeth)
Mr. Richard Adams.


Ranger, J

Orders of the Day — CRUELTY TO CHILDREN

7.8 p.m.

Mrs. Ayrton Gould: I beg to move,
That, in view of the many cases of cruelty and neglect of children who were not included in the terms of reference of the Curtis Committee, this House calls upon the Government to appoint an official committee to inquire into the extent of the evil and make recommendations for effective prevention and remedial treatment.
In moving this Motion I want to thank the Government for giving us the opportunity to debate this vital question. The number of children affected may be relatively small, but the court cases are not only increasing in number but they are becoming more serious and more distressing. Only last week a child of 11 months died and the post-mortem showed that it had died of starvation and neglect. It is dreadful to think of the frightful sufferings of that child and of all the other children whose cases ultimately come before the court, many of whom have suffered for months and sometimes years before their cases become public.
One of the most serious aspects of the problem of child neglect and cruelty is the means of ascertaining the number of children who are seriously neglected and ill-treated. Hygiene officers and workers in touch with scores of cases week after week, month after month and sometimes for years on end, very often report these

cases but nothing is done because the local authorities state that they have no power to interfere with these children in their homes if there is no question of criminal prosecution. The powers of the National Society for the Prevention of Cruelty to Children are equally limited, and very often their inspectors are terribly frustrated. But I should like to pay a tribute to them and to say what very fine work has been done for many years by the devoted workers of that society.
The greatest difficulty, as I see it, is finding some means to safeguard these children before irrevocable harm has been done, before they have been battered by mental and sometimes physical cruelty into human wrecks or worse. Thank heaven today public conscience is awakened to these matters. Society in this country cares about the welfare of the children. Only a little over 100 years ago, thousands of small children were driven into mills and into mines to work 15 hours, a day, and it was proved before a Select Committee that every child who did not die in the first few months, became deformed. It was also revealed that in every mill there was an overseer whose sole duty was to go round with a strap to beat the tired children into sufficient wakefulness for them to go on with their work. The conditions in the mines were even worse.
In spite of the publicity given in those days to those appalling conditions nothing was done for many years. The position was very different from today since then, apart from Lord Shaftesbury and a tiny handful of supporters in both Houses, no one was in the least interested in these terrible revelations. I feel sure that the position is so changed today that there will not be a right hon. or hon. Member in any part of the House who is not in principle in favour of this Motion. Today all the glaring abuses have been swept away. The progress made in child welfare has been really wonderful and under The Children Act, which became law last year, every child has a right to care and protection, to be properly housed, fed, clothed and educated. But in spite of all this there are still children as helpless, as wretched, as cruelly treated as the children in the mines and mills 100 years ago—not because society does not care, not because the Government do not want to prevent it, but because we have not yet found a way to protect these children from the callous brutality of their own relatives.
The problem is a very difficult and complex one. That is why we who have promoted this Motion feel that an investigation by thoughful and responsible people of varied experience and qualifications is the right way to help to solve it. We feel, in short, that an official committee similar to the Curtis Committee should be set up to inquire into the conditions of the children in their own homes; to inquire how ill-treatment and serious neglect can be prevented; what should be done along the lines of prevention and what can be done in the way of remedy. We feel sure that it is possible, with enough care and thought, to find a way to protect these most deprived children and to give them the welfare conditions to which every child is entitled.
Some people believe that there is already ample provision to safeguard the children who are deprived in their own homes. Unfortunately, this is not true. One of the great difficulties is the question of entering the home of the child when it is known that something very wrong is going on. Hygiene officers, welfare officers, teachers, various responsible people of this sort may know that there is not only serious neglect but actual ill-treatment which is seriously harming the

child, mentally and physically, and yet, unless it is possible to institute criminal proceedings, nothing can be done, unless, of course, the parents will co-operate by inviting an officer into the home.
Naturally, the worse the case is the less anxious the parents are to have any outsider come in and look at the home. That is why, in the very worst cases, after terrible harm has been done to the child, action is taken in court and nothing has been done before it became a court case. Other cases of neglect are very often the result of a mother having to bring up a family in slum conditions and having lost heart and so given up the struggle, or a mother who is mentally unstable and physically debilitated. Or it may be the case of a mother who is frightened of her husband—a brutal husband who may be cruel to all the children, or in some cases to one or two children who are his wife's but not his. Again these conditions bring problems of their own, although the hygiene or welfare officers soon become welcome visitors in these homes and are very often able to help a great deal.
I should like to cite an example, and I give it only because it is a typical case. I have selected it from the many cases which have been brought to me. It is the case of a father who is serving a long term of imprisonment. The mother and six children were living in a slum dwelling and the conditions had become really dreadful. The children were ragged, they were not properly fed, they were dirty and verminous, and generally in an appalling condition. This was one of the cases where the mother welcomed the welfare officer and, finally, five of the children were sent to a local authority home and the mother, with her baby, was sent to a voluntary home for the recuperation of mothers. In two months she has become not only a fit human being, but also a reformed character, anxious to have her children at home, and to make a good home for them; and she has learned a great deal of mothercraft to help her do it. But if she goes back to the slum home which she left, then in two or three weeks' time conditions will be just as bad as they were before.
Meanwhile, the borough and the county authorities throw the case from one to the


other, as it were. Neither wants to provide a council house for her; they do not look upon the mother as a desirable tenant; and there seems no possibility in these days of shortage of removing the family into another home. What is to happen to them? Are the children to live on the rates until they are grown up and bread winners? Is the mother to go on living from pillar to post, and having only the baby at home—and possibly that may be taken away from her ultimately because it is neglected? Or should there be some priority is housing for these such cases? That is one of the problems that an inquiry should look into.
Another serious problem is the impossibility of preventing children from returning to completely undesirable homes. I will give a couple of examples of these. Again, these are merely two examples out of many similar cases that there are. There is a couple of very unstable parents with a three and a half year old child. The mother has been three times a voluntary patient in a mental hospital. She ought to be going back, but will not do so. The child has been found several times by neighbours crying because she is terrified of the way in which her parents quarrel. The child was in a poor state of health and was not properly cared for. She has been away now for some weeks with a foster mother with whom she is happy. The mother is now at home and demands that the child should be returned to her. At present there is no power to keep the child from going home to its own parents under the most undesirable conditions.
The other case is perhaps even worse; it is one of a mother who, during the war, deserted her six children while her husband was abroad. The children were left with a very undesirable neighbour. The husband was a good soldier with a fine record. When he came home he was very much distressed at the children's condition, and went to the school care committee about them. Ultimately, three of the children were removed to foster homes where they were extremely happy. The father died this summer. The mother has now married the man with whom she was living. She has taken the children home after deserting them for five years although they were heartbroken at leaving

their foster parents. The children are getting into a terrible condition. They look ill and uncared for. The mother drinks terribly. She has forced the eldest girl, who was an apprentice in a good job, to leave and go to work in a low class café. The girl is too frightened to do anything but give all her money to her mother, who is drinking it all away.
All these cases need looking into—not these particular cases only but all the problem cases arising—because we want to stop this sort of thing from going on. Most important of all, when responsible people such as hygiene workers, welfare workers or teachers, make complaints, somehow it should be possible for the local authority by a statutory right to have access to the undesirable home so that it may be found out what is going on there. At present a child in a foster home can be got at, because there is a right of access. There is no right of access to any child in its natural home, however unnatural that home may be.
These are a few of the problems we feel should be inquired into, and that is why we have set our hearts on the setting up of an official committee with terms of reference which will enable it to cover all the problems of the children who did not come under the terms of reference of the Curtis Committee. We ask the Government to accept this Motion because we are convinced that such a committee can solve, to a very great degree, all these problems. The task is very urgent because, in the midst of all the welfare that is provided for children today, there are in their own homes a number of children who are just as wretched, just as helpless, just as ill-treated as those children in the mines and in the mills 100 years ago. We must not fail them. We must find some way to give them the protection they need—as soon as possible before the harm has been done to them that turns their misery into court cases.

7.26 p.m.

Mr. Somerville Hastings: I beg to second the Motion.
I think we shall all remember how we were shocked when the report of the Curtis Committee appeared and the facts which the Committee investigated


became known. Those who were members of that Committee will, I think-all of us—agree with me when I say there were just as sad cases of which we had knowledge—cases which occurred concerning children in their own homes—but which were outside our terms of reference. I think that those who, like my hon. Friend the Member for North Hendon (Mrs. Ayrton Gould) and others, have knowledge of these sad cases will agree with me that, perhaps, the saddest thing about them all is that the ill treatment and neglect were not of days and weeks but of long duration, so that there is a scar—in most cases permanent—on the mind of the child affected.
We in this country have in the past been apt to regard the family of a man as part of his chattels—almost—to do as he likes with. We have advanced, certainly, from the days which are described by the author of "The Barretts of Wimpole Street," but still we regard a man's home as his castle, without inquiring into what happens in the dungeons of that castle.
Certainly, in connection with health the tactful health visitor, as has already been pointed out, visits homes in cases of all types of sickness, and gives any advice that may be necessary; but the welfare of a child is just as important as its health, and homes, where necessary, must be investigated. At the present time, so far as I know, there is no statutory authority on whom the duty is laid of protecting children in their own homes who appear to be neglected there.
We are dealing with the health of the children, and their education and their physical needs through family allowances, the Assistance Board, and in the case of orphans through national insurance payments, but those supporting this Motion are inclined to think that there are other matters of equal importance. There is the emotional development of the child, which may be so seriously affected by cruelty or neglect. We know that neglect and cruelty come from many causes, but there is no doubt that one of the causes is poverty, especially with a large family of children born soon after one another and with very short intervals in between.
Cases of that sort have been extensively investigated, and we know that the mothers, who are often in bad health,

reach a state in which they feel unable to deal with the situation, so that they give up all hope, and neglect begins and continues. Now, we are not convinced that the provision for these cases has been sufficient in the past. To send a woman to prison for neglect of her children, much as she may deserve it, may not be best for the family. Could not more use be made of probation? Or better still, could not these cases be found at their earliest beginnings and remedial treatment undertaken?
The first thing in dealing with such families as I have described, is, I think, to understand the mental outlook. I have here a book entitled "Children in Need,"" written about some of these problem families. In it is a quotation from another book called "Branch Street," by Marie Panetti, which seems to me so significant that I would like to read it:
Their background, their bagful of experience, has taught them not to trust and not to hope, but to attack, to grab, to lie, to steal, to cheat—all of which are the reactions of people against a world they fear and in whose merciless power they feel themselves to be.
Surely the first thing to do is to get the right attitude to society into the minds of these people. I feel that an inquiry should be made into how that can best be undertaken. It has been carried out successfully in connection with home advice services, such as have been instituted in the City of Norwich, and there are the Family Service Units. If there is clear evidence of real affection in the parents, and if the condition has not got too far, an attempt at rehabilitation: should be made.
What I think this official committee, if appointed, should do is shortly this. They should inquire into whether there ought not to be in every area some authority, well known to all those who are interested in children and who have their care, to whom even a suspicion of neglect or ill-treatment could be reported. In such cases there could be a careful and tactful inquiry by some officer, and if there is evidence of either cruelty or neglect the case would have to be dealt with. If a case is recognised in good time it can generally be dealt with without recourse to the law.
There is just one other type of case I should like to mention. It is a type met


with and described by the Curtis Committee. It is the case of an unwanted child who is passed over directly by its mother to some other person. This is known as direct placing. At the moment, if there is no monetary exchange, and if there are no proceedings for adoption, it is quite outside the ken of any local authority, and there is no inquiry and no supervision whatever. This is the sort of thing that can happen, and I fear is happening very frequently. A woman who is going to have a child does not want it known, and wants to get rid of the child as soon as possible; there are nursing homes who take in such individuals. In return for care in her confinement and assistance in disposal of the child the woman is prepared to work in the home for weeks or months, both before and after the confinement, and the child is passed on to almost anyone who will receive it. Indeed, there have been cases in which the child has been sent a long railway journey and died on the way. As far as I know, that is quite within the law at the present time.
In conclusion, I should like to mention a case of this description which was brought to my notice by the L.C.C. officers. An unmarried mother wished to have her illegitimate child adopted. A couple desired to have the child and adoption proceedings were instituted, but when the court made inquiries it was found that these two people were not married and were most undesirable people having both served terms of imprisonment. The court therefore refused to make an adoption order and the child was returned to its mother. A few days later the child was passed directly to these same two people, without any payment being made and without any attempt at legal adoption. That is apparently at present quite within the law, and as far as I know the child is still with them.

7.39 p.m.

Sir Ronald Ross: I intervene in this Debate because I have long been interested in this question, because I think it is a good thing that it should be discussed in this House, but more particularly because for some years now, I have had the privilege of being a member of the Executive Committee of the National Society for the Prevention of

Cruelty to Children. I thank the hon. Lady the Member for North Hendon (Mrs. Ayrton Gould) for the tribute she paid to its work. It is a society which is encouraged by the personal interest of the Home Secretary, and I think by the majority of his predecessors. It extends over the whole of England and Wales, and the whole of Ireland, including the Irish Republic. In Scotland there is a sister society—the reason for having a distinct Scottish society being that the law of Scotland is so dissimilar from the law of England that it is better dealt with by a separate society. The two societies have the most cordial relations and a very close liaison.
I think that the society and its supporters are to be congratulated. The society was started 65 years ago, before the country was conscious of these needs in connection with children. During that time, very substantial progress has been made. In 1901, the Society instituted 2,884 prosecutions, the prosecution, of course, being the ultimate weapon. In 1922, the prosecutions had come down to under 1,000. This year they numbered 626 at the last convenient date, and 442 cases in the juvenile courts. I think that we all agree that there is no adequate substitute for a happy home for a child. However well conducted an organising institution may be, it cannot give a child the advantages of a really happy home. When I look back upon the blessings of my life, the greatest blessing I can count is that I was a member of a very happy home.
The Society is not a prosecuting society. The prosecution is the last resort. Of the cases investigated by the Society, only 2 per cent. resulted in prosecutions. The main thing is reporting. If a case is reported to the Society, either to the local secretary, the local inspector or to headquarters, I can promise that it will be investigated immediately. The difficulty is to get prompt reporting of the cases, and it is very necessary that there should be no delay. The hon. Member for North Hendon emphasised that point very effectively when she said that the state of a child might deteriorate very rapidly unless there was prompt action.
I think that the machinery for doing this already exists. Whether more legal rights should be given to whatever officer or person is investigating a case of child


neglect or ill-treatment—and neglect far surpasses ill-treatment and cruelty—is a matter which I do not propose to discuss, beyond saying that the right of entry into people's homes is a very serious step to take. I think that the experience we have had is very substantial because over 40,000 cases are investigated each year by the National Society. Last year, over 98,000 children were concerned in the investigations, and over 500,000 visits were made by the Society's inspectors. As to whether it is necessary to have the right of compulsory entry, I should hesitate to express an opinion. Perhaps the right hon. Gentleman may have something to say on that point.

Earl Winterton: All that we are asking for is an inquiry into these matters by an impartial official body.
Sir R. Ross: I appreciate the interruption, for which I am grateful. We are only discussing whether it would be right and proper or desirable to have an inquiry. Nothing is being asked for immediately. That is, no doubt, one of the points that will be considered.
I would say that the society's inspectors are fairly successful in their investigations. The case which the hon. Lady made about a hygiene officer is almost a commonplace with the inspectors. They do their best to gain the confidence of the parents and are often looked on by them not as a hostile body, but as friends. There are matters, however, where I think official action could help. One is that there should be more accommodation for defective children who require special education facilities. That is a very difficult problem. Another is this: When a child has to be removed to a place of safety, there is not always a place of safety available. Here I would pay tribute to the many organisations, including Dr. Barnardo's, which do invaluable and devoted work in this connection.
A third point—and I do not raise it in any party spirit, although I might do so on another occasion—is the question of housing. Housing is a very important element in this problem. One inspector has said that in his district no less than 50 per cent. of the cases which came under this notice were directly due to the housing problem. I mention as a factual statement that housing is a very important matter in connection with the problem of child welfare.
Another matter which, I think, should be mentioned is the standard of neglect. It is always difficult for a poor woman with a large family to maintain that good standard of care and attention which one would wish to see. It would be unfortunate if any nagging authority were to pester these poor women who are doing their best to keep a home going. I would say in passing, that the W.V.S. have done good work in helping such people. The greatest need is for prompt reporting of these cases, and it may be that if officials were encouraged to report, things would get better.
In the course of one year, over 10,000 cases were reported by officials of one sort or another, apart from the 3,000 to-4,000 cases to which the society's attention was drawn by the police. Sometimes there is delay which is very dangerous. Unfortunately, many people think that if they report somebody, that person will be prosecuted instantly. Of course, that is not so. A prosecution generally means the breaking-up of a home, which, as a rule, is not good for the child. What is needed is the reform of the home, and it is curious how often that reform can be achieved.
I think that the machinery already exists if people would only tell the society or its representatives about these cases. There are 270 inspectors at work in the area with which the society deals and more are employed in Scotland by the Scottish society. If the encouragement of officials to report cases for investigation led to increased work, I think that the society would be prepared to put on more inspectors. As it is, the 270 inspectors have achieved over 500,000 visits and dealt with 98,000 children in a year. It would be unnecessary to appoint more inspectors for the time being, but if more are needed they will be appointed.
We are all agreed on this question, which is above party, of the vital importance of taking care of children. The child has no defensive powers of its own to save itself from neglect, and neglect is really the greater danger, 87 per cent. of the cases being neglect and only 13 per cent. actual cruelty. The child cannot protect itself, and it is therefore the duty of us all to see what best can be done. I represent a body which is not jealous of its own position, but it is jealous of the interests of these children.

7.51 p.m.

Lady Megan Lloyd George: I am sure the House is indebted to the persistence and pertinacity of the hon. Member for North Hendon (Mrs. Ayrton Could) that has happily resulted in a second Debate taking place within a few months on this vital matter, which I hope will bring an even richer reward before the evening is over. We are justly proud in this country of the welfare State that has been built up over a number of years. Caps have been filled in our social services and new categories have been brought in, but this relatively small and pathetic community of neglected and ill-used children is still left shivering in the cold, in spite of all that has been done by voluntary effort.
We are all anxious to pay our tribute to the National Society for the Prevention of Cruelty to Children for the magnificent job of work they have done, very often -with shortage of staff and shortage of funds. No praise could be too high for these devoted people. But in spite of their work, in spite of legislation passed by this House, the problem still remains virtually untouched. No action can be taken today to protect these children unless some irreparable damage has been done and can be shown to have been done. That is a most serious state of affairs which must be put right by the House without delay.
It is difficult to assess the number of children involved. In 1949, the R.S.P.C.A. [HON. MEMBERS: "NO."] The craze for initials has become almost a curse, and ought to be ended. In 1949, the N.S.P.C.C. dealt with nearly 100,000 children, and only 626 prosecutions were instituted, on the only grounds on which prosecutions can be instituted, that of criminal negligence. How many of the 99,000-odd children not protected by the law as it stands can be quite rightly classified as neglected and ill-used? How many more are there about whom we have no information of any sort?
The last occasion on which we discussed this matter the Under-Secretary told us that hints had been given in circulars sent out to local authorities. But we have now got past the stage of hints to local authorities. He told us that he did not know what the reactions of the local authorities had been, and I hope the Home Secretary will be able to give us

some information as to the response of local authorities to the hints given five months ago. The Under-Secretary also spoke of the difficulties that have to be faced in tackling this problem. Of course there are difficulties. There are always difficulties to be faced in overcoming social problems of this kind, but they can be faced and overcome.
There is the danger of giving a statutory right of access to homes of the people. None of us wants to start a new snooping service into the private affairs of the citizens of the country, but there are what might be called accredited agents in touch with the homes, such as the teachers, to a limited extent, health visitors, and those in the home nursing service and the domestic help service.
Whatever duties it is decided to impose, whatever responsibilities are to be given, whatever categories of people are to be given those responsibilities and whatever action is to be taken as a result of the information given, these are all matters best dealt with by an official committee of inquiry of responsible and well-chosen people. All we are asking for in this Debate is that an inquiry should be instituted without delay. Five months have already gone by since this matter was first brought up in the House. We beg of the Government not to let another month go by, because each time we delay we are condemning these children and extending the sentence of misery and neglect they are already serving.

7.58 p.m.

Mrs. Nichol: It is a matter of personal regret to me that I was unable to be present when the Debate on this subject took place on 22nd January. Some extremely valuable speeches were made in all parts of the House on that occasion. I feel it is good to raise this subject, because it gives encouragement to those who are doing child welfare work, both in voluntary and non-voluntary organisations, and it allows the country to see that Parliament is vigilant in this grave matter and that these questions can be discussed without party controversy. I had hoped that this Debate would not explore the ground that was so fully and adequately covered on the last occasion, because the Motion before the House takes the matter a step further, and it is important that we should


discuss the practicability of such an inquiry and its probable results.
Reference has been made tonight to the Curtis inquiry, and an analogy has been drawn between the proposed inquiry in this instance and that which was held under the chairmanship of Miss Myra Curtis. May I remind hon. Members of the differences between the two? In the case of the Curtis Committee we had very specific and circumscribed terms of reference. There was also fairly easily ascertainable data in existence, evidence which was fairly easy to verify, and the practical work which was able to be done by the Committee through visits to homes and institutions of a voluntary and a nonvoluntary nature. I think that the proposed inquiry in this case could not possibly be as specific as that, for various reasons.
Much cruelty of a non-physical nature is inflicted upon children. I think it is impossible to get evidence of the kind of cruelty which arises sometimes because parents are maladjusted, because the child is perhaps less attractive than its brothers or sisters, because it is suffering from a physical deformity or is handicapped in some way, because the child was not very much wanted or because of the jealousy of another member of the family. For many reasons much mental cruelty is inflicted upon children, and it is not confined to any one class. Suppose this kind of cruelty could be inquired into. What could be done about it, even when it had been investigated? I do not pretend to be a psychologist, but those who have studied psychology tell us that this kind of cruelty is often, in the end, a great deal more harmful to human beings than is physical cruelty.
Who will give evidence at the inquiry? Such evidence can only come from those who are engaged in work concerning children. I submit that we can get all the statistics now; we can only inquire of those who are already engaged in this work, such as teachers, welfare workers, probation officers, nurses, health visitors and the great voluntary organisations. I cannot see how we could obtain a new supply of information and evidence. I feel that no inquiry could be really effective unless its terms of reference were clearly defined and its recommendations could be made effective very promptly.

Here, we are up against serious difficulties; we really do run against rocks.
When the evidence has been collected and collated the responsibility would have to be placed upon an existing Government Department. If it is to be the children's department in the Home Office—and in the Debate in July it was stated that it was very likely to be this department—I would remind the House that there is a great shortage of staff there. Further, this department has scarcely settled into the great work which it has undertaken, and for which it was specially instituted. We have not nearly enough trained people in the children's department or trainees coming along, and we do not know where to get them. There are not enough nurses, either. If we institute an inquiry of this kind, which will probably recommend that further investigation work be done by highly trained persons, I would like to know where we shall get those people.
A great deal of machinery already exists. On the education side, there are teachers and welfare officers. There are health visitors under the Health Service Act, Section 24 of which places wide powers in the hands of such visitors. It not only allows them access to homes which need to be inquired into, but makes it compulsory that they should visit such homes. There are home helps, nurses, housing managers—some of whom, I am glad to say, are women—probation officers, the staff of the children's department of the Home Office and there is the vast amount of valuable work which is done by the N.S.P.C.C, to which tribute has been paid today, and the family service units.
If I had been a foreigner, and had read the speeches which have been made by my hon. Friend the Member for North Hendon (Mrs. Ayrton Gould) and my hon. Friend the Member for Barking (Mr. Hastings), I might have formed the impression that the British are rather bad parents. Actually, the contrary is the case, the British are good parents; we love children and animals. Indeed it has become a joke abroad. Bad parents form only a very tiny proportion, almost infinitesimal, of the total number of parents in this country. I agree, of course, that even if there is only one suffering child, we must do something about it, but we must be careful not to


give the impression that we are a nation of child neglecters, or that British parents as a whole are not good parents. I believe that a great deal of the cruelty that is caused is not wilful. I think it often arises because of circumstances which are too much for the mother. Sometimes it is due to bad housing, and of this the Government are fully aware and are doing their utmost to deal with it in spite of what hon. Members opposite may say. I think much of it is due to fecklessness and shiftlessness on the part of some parents. As I say, it is not wilful; many parents would not believe that they were cruel even when the cruelty was pointed out to them.
In the Debate in July it was stated that a possible cause of child neglect was because of mothers going out to work. I represent a constituency where a great number of married women with children go out to work. In defence of them I would say that a great number of these women are far better mothers than some of those who stay at home. There are women who stay at home and spend many hours of their day in what we in Yorkshire call "calling." They go into a neighbour's and sit and gossip while the hours speed by. Meals are not prepared and the ironing, sewing, mending and so on are neglected. A good many mothers who go out to work plan their day and take advantage of the help available and their children are properly taken care of. The cases of deliberate and vicious cruelty are, of course, very well ventilated in the Press, and they come to the Press via the police courts and the N.S.P.C.C.
We must be careful not to give the impression that this matter is not being looked after. A great deal is being done. The problem has existed for a long time, but now we are a great deal more aware of it. I do not need to convince the House of my own deep personal concern in this matter. I feel very deeply and strongly about it. I am not against an inquiry, but I am only anxious that we should be aware of the difficulties which would arise if an inquiry were held. An inquiry frequently leads people to believe that something startling and searching will result from it. If that were possible I am sure the Government would allow it, but I agree with my hon. Friend the

Under-Secretary of State for the Home Department when he said in July that it was very difficult to do more than was being done at the present time in the present great shortages of staff.
The Under-Secretary promised us that there would be departmental consultation, and that was only five months ago. Despite what was said by the hon. Lady the Member for Anglesey (Lady Megan Lloyd George), I do not think five months is a very long time. The holidays occurred just afterwards, and these consultations started immediately and are still going on. It would only be fair to give these inter-departmental consultations a chance. We might then find where are the gaps in the administration, and if these exist they could be tightened up. There must be a little more time to collate the information provided by consultations between the Departments. A great deal of good might come from them without having to have any inquiry. By tightening up the administration, if it requires it, we can ensure that the services and the machinery are being used to the full to secure proper family welfare.
I do not want to give the impression that I do not share fully the apprehensions and the misgivings that all of us in this House feel about the number of cases of child neglect, and many of intense cruelty. I do, but we ought to be very careful not to give the impression that we are a much worse nation than we are—an impression that nothing is being done or that there is no machinery for dealing with it. If an inquiry is finally decided upon I hope the terms of reference will be specifically stated, and that it will be done in the light of what practical measures can be taken. We should remember that nothing can be more disappointing than an abortive inquiry which in the end fizzles out because we ask it to do something which it is not able to accomplish. If an inquiry is finally decided upon, I hope it will be done in such a way that practical recommendations will be forthcoming to cure the evils which we have been discussing tonight.
My own feeling is that there is machinery already in existence, and that these departmental consultations should be given a chance. We should not embark upon anything or, indeed, promise anything of a far reaching nature without


being perfectly certain we have got staff to undertake it. Above all, we want to be careful that we are not going to engage Departments which are already stretched to the uttermost, to cope with the work of such an inquiry, which would result in their being diverted from the job which they set out to do only a short time ago.

8.17 p.m.

Mr. Godfrey Nicholson: The House knows that the heart of the hon. Lady the Member for North Bradford (Mrs. Nichol) is in the right place. I certainly know it from my personal acquaintance with her, but I very much regret the speech which she has just delivered. Upon reflection I am sure that she will regret it too. It was a speech of a typical bureaucrat. I do not see how she can deny that much is wrong. I do not know how she can deny to the people of this country the right to have investigated what is wrong. There are difficulties, including those of administration, but in a case like this both sides of the House agree that these difficulties must be got over. I feel confident that the Home Secretary will agree to an inquiry taking place.
The genesis of this Debate is the uneasiness of the public conscience at the cases of terrible cruelty that arise and are known, and an uneasy suspicion, which we all have, that there are many cases—one does not like to say "more"—which do not come into the open. That alone is justification for an inquiry. If it only results in public uneasiness being set at rest something will be achieved, but I fear it will not result in that. It will show that these cases are on the increase, and that they are not being punished adequately. I do not necessarily mean that the punishment is of insufficient severity; in many cases it is not done in the right way. The hon. Member for North Bradford is making a grave mistake if she thinks that those who are anxious and uneasy on this whole subject can be put off with the sort of speech which she has delivered.

Mrs. Nichol: I certainly did not give any impression that I wanted anybody to be put off. I made it quite clear that I was not against an inquiry, if we could have guarantees that such an inquiry would be useful and would serve a purpose.

Mr. Nicholson: I quite agree. I am trying not to do the hon. Lady an injustice, but before an inquiry takes place there cannot be any guarantee as to its effectiveness or as to its recommendation. An inquiry must take place, and then we can criticise it if its results are ineffective, or if its recommendations are not what we think they should be. The case we are making out is that an inquiry should take place. It may result in a waste of time and money, or it may not, but as Mr. Speaker would say, we believe that there is a prima facie case for such an inquiry. I have the House with me in saying that, and demanding an inquiry into these cases of gross cruelty and into the way with which they are dealt. The problem that the Home Secretary is facing—I hope he is facing it—is the scope of the inquiry and its terms of reference.
I would suggest three lines of approach. The first is what I call the obvious one, concerning cases of outrageous and gross cruelty. Are they on the increase? Are they being satisfactorily detected and dealt with? The second line of approach is in regard to something which is really much more important. It is that some attempt should be made to do something more than to shut the stable door after the horse has gone. It is no good catching up with the cases of extreme cruelty when they have reached the level of extreme cruelty. I should like to see the inquiry trying to find out what steps are being taken to help parents with difficult children. We have all had experience of difficult children, not necessarily our own. Probably many of us have been difficult children. When I see some difficult children, I have a great deal of sympathy with King Herod.
It is not an easy matter. We all know the great care and forbearance with which it is necessary to deal with a difficult child. One's heart bleeds at the thought of impatient and unsympathetic parents dealing with children of that sort. After all, even the most moderate and well-behaved children, like my own, sometimes need forbearance. I believe that the inquiry must extend into the question whether more guidance can be given and in what field it ought to be given.
But the main field for the inquiry is as to the boundary line between official action and voluntary action. I was sorry


to see the letter in "The Times" this morning from Mr. McCann, the secretary to the N.S.P.C.C, in which, it seemed to me, he overstressed his case which, roughly, was that there is no more room for official action or administrative action on the part of the State or the local authorities, and that the situation now can be dealt with only by voluntary organisations. I do not affirm that and I do not deny it, but I say that there is a case for inquiry into that question. I can see a great deal to be said on both sides.
We are much too prone to think that because a child has been sent to a good institution the problem of that child is satisfactorily settled. That is a fatal approach. We are much too prone to think that it is better to take a child away from a bad home to a good institution, but very often that is not the case. One of the great disadvantages about an institution is its constantly changing management, with the result that a child in the course of its life may fall to be dealt with by dozens of different people. I think that often the most inferior parent is better than the best voluntary or paid workers who are constantly being changed. Questions like that ought to be gone into.
The final question with which the State will have to concern itself sooner or later is the plain and simple fact that a nation stands or falls by its standards of home life. I do not want to weary the House by platitudinous remarks on a subject on which we are all agreed, but sooner or later, unless, things improve in connection with children, unless juvenile delinquency decreases, and unless the citizens of this country show a greater sense of public spirit and obligation, one day, perhaps not in our lifetime, the State may have seriously to consider how it can rebuild the standards of home life that have brought mankind from a state of savagery to a state of comparative civilisation.
Again I do not want to weary the House, but I would ask the patience of hon. Members while I read out a few sentences from the leading article in "The Times" this morning. It says these words:
Cruelty and neglect, in fact, need fresh definition, so that child-suffering will not be thought of only in physical terms with too little regard to mental ill-treatment or to home

circumstances. The misery of a child subjected to the continuous nagging and threats that come from a lack of affection, or from a home divided or insecure, may well be more significant in the long run than bruises and weals which can be shown in court or recorded by a witness. The Debate today cannot ignore these invisible scars.
The House of Commons, if the discussion is to be at all comprehensive, will also have to consider the plight of children of divorced parents, whose welfare and supervision seem to be nobody's business once legal custody has been settled. It will have to consider, too, the dangers which, in spite of new legislative proposals, adoption still has for some children, since they can still be adopted in an informal fashion, dispensing with legal forms, proper inquiry, or any kind of supervision.
It concludes with these words, which may seem at the moment far outside the scope of legislation or of administration, but which represent the kernel of what we are thinking about:
The real responsibility is, and must remain, that of parents. It is to parents, and not to public substitutes for them, that policy must first look before seeking other remedies. A study of mothers in prison for child neglect showed that, alongside illhealth, poverty, and lack of help, ignorance of child care was a chief cause. Family care work by voluntary bodies, the home advisory services of some local authorities, and the experiment in residential rehabilitation conducted in Lancashire point out a way.
I commend to the House this last sentence:
When all material help has been rightly given to these unhappy parents, only the wider awakening of a proper sense of parenthood, with its deeper spiritual meaning, can cope successfully in the end with cruelty and neglect.
Something is wrong. No Member of Parliament, with his knowledge of his constituents of all classes of life, can, or should be able to, sleep peacefully in his bed at night when he thinks of the number of unhappy children that are sleeping, or are vainly seeking sleep, at the same time.

8.28 p.m.

Mrs. Middleton: I am certain that no one in this House will dissent for one moment from the importance of the subject which has been brought to our notice tonight, and everyone will want to thank my hon. Friend the Member for North Hendon (Mrs. Ayrton Gould) for giving us a chance to consider it. At the same time, it is very important that we should not get the matter out of perspective. After all, the number of children affected is only a very


small proportion of the total child life of the nation, and it is a diminishing proportion, as has been so well shown by the figures given by the hon. Member for Londonderry (Sir R. Ross). All that has been done during this present century, and especially in the last five years, to assist parents in discharging the duties of parenthood has brought about this happier state of affairs.
I doubt if there is any country in the world where the children of the nation as a whole are so well cared for as they are in Great Britain. In making that statement I have at least some evidence upon which I can go because during the last two years I have had the honour and privilege of being a delegate to the Inter-Parliamentary Union and on behalf of that body I have been surveying legislation throughout the world for the protection of mothers and children. That work has been far and away the most satisfying work I have done since I was elected to this House. It is true to say that all over the world there is a developing conscience about this subject of child welfare and an increasing sense of responsibility towards the protection of the young life of the human family.
In some countries legislation is still far from what we would desire it to be. Great Britain's record stands very high indeed and is setting a standard which it is the tendency for other nations to try to emulate. I mention these facts not in order to detract from the importance of the subject which we are discussing but because, after all, legislation in democracies is the outcome of public opinion, and I believe that the fact that our legislation is so good is testimony to the great importance which public opinion in Great Britain attaches to the welfare of the child.
In saying this I am not unaware of the bad spots, nor of the importance of this Motion. At the same time I confess that what has always surprised me has been the degree to which parents, especially parents in workingclass families, have been willing to sacrifice themselves and all that they have for the sake of their children. One might often call in question their wisdom in dealing with their children. In the main one has to say that their devotion to their children is entirely beyond question.
Therefore if this Debate is to fulfil its purpose we need to apply our minds to

the relatively small number of cases where children are suffering from neglect. I suggest that the causes of that neglect are three-fold. In the first place, we have to consider those parents who are -physically and mentally unfitted for parenthood, especially those who are mentally unfitted. I shall not try to open up a controversy tonight such as that which surrounds the proposals for the sterilisation of the unfit. I would, however, say that where parents who are physically and mentally unfitted for parenthood beget children and subsequently neglect them, imprisonment or fines are quite useless methods of trying to deal with the situation. There is only one hope for such children and that is to provide them with a new home, and that, happily, in the majority of cases the community is now able to do.
The second cause of neglect of the sort we are considering arises from environmental conditions, particularly housing conditions to which reference has already been made. I expect that every hon. Member is aware of the social survey, a copy of which I have in my hands. It is entitled "Our Towns," was published during the years of the war and was the result of an inquiry carried through by the National Council for Social Service. I should like to trouble the House with one short quotation from it:
Poverty leads to bad housing without the space, water supply, food storage, cooking facilities and private sanitation essential to good home making. Ill-found accommodation encourages bad feeding Slum conditions—noisy streets, crowded beds, the irritation of bugs, lice and skin diseases—murder sleep. Everything that militates against healthy living encourages skin diseases, which are often closely associated with vermin. Bad feeding, inadequate sleep, insufficient air and lack of healthy exercise and recreation affect mind as well as body, and aggravate the serious and growing problem of the dull child, already estimated by the Board of Education to number 15 per cent. of eight-year-olds in elementary schools. According to the Report of the Mental Deficiency Committee, dull children grow up to produce most of the problem families of the next generation, including many of the feeble-minded. They bulk large among the unemployables and are often dangerously suggestible. Their dullness leads to bad spending and household management, undeveloped character and lack of parental control. Juvenile delinquents are strongly associated with poor parental control and also with dullness and backwardness.
There we have the vicious circle showing how bad housing in one generation


leads on to circumstances begetting the same kind of problem in succeeding generations. Nothing is more heartbreaking for a mother than to be struggling with family responsibilities under conditions that never give her a chance—overcrowding, lack of the ordinary domestic amenties, no privacy within her home, unnecessary drudgery. Jt takes a heroine to struggle against handicaps such as that, and to try to do all that she otherwise would do, easily and willingly, on behalf of her family and her home.
Speaking as one who sits for a constituency where the housing problem is still enormous despite more than 6,000 new homes opened since the war, I am amazed at the high percentage of such heroines among the womenfolk of our cities. I have also noticed that often when a family has been removed from overcrowded, unhappy conditions on to one of our housing estates, family life becomes a different and much better thing than it was before. The improvement in the material surroundings has led to an immediate improvement in the social environment of the child. Therefore I say that good housing is perhaps the chief factor in the solution of the problem which we are discussing tonight.
Thirdly as a cause of neglect, I would put the lack of training for parenthood among our young people. It is surprising, is it not, that this most delicate and difficult task of bringing up a young child is so often entered upon with no preparation at all. I know that girls below the age of 15 years get some kind of training in cookery, laundry, housewifery, needlework, and so on, while they are at school. Sometimes they even get lessons in caring for a baby. All that is to the good but, under 15 years of age, boys and girls are not sufficiently developed for understanding the psychological, moral and material factors which combine to the making of a good parent. So I hope that, when the Education Act is fully implemented and our county colleges are established, we shall not neglect this part of our educational work but that we shall use those county colleges to assist our young people to an understanding of all that goes to the making of a good home, a good parent and family happiness.
That, then, is one of the things to which we ought to pay more regard, the training of all young people in the responsibilities of parenthood. That kind of work can be supplemented and, indeed, is being supplemented today by the work of a considerable number of voluntary agencies. Churches and religious organisations are doing some of the work very well indeed. A good deal can be done, in some cases is being done, in community centres on our housing estates. Much is being done in those localities where the local authority has had the good sense to provide welfare officers for its housing estates.
Women's organisations like the Mothers' Union are making contributions to this work, and, after school age, I do not think we can over-emphasise the valuable work that can be done by such organisations as parents' and teachers' councils. Indeed, I should like to pay tribute to the mostly unacknowledged work which is often done in this connection by headmasters and headmistresses, not by reporting cases of neglect to the local authority or to the National Society for the Prevention of Cruelty to Children, but simply by sending a note to ask the parent to come for a private talk and, during that talk, doing a good deal of the work which we are asking, by the Motion, should be done on behalf of neglected children. There are, however, cases which, even by those means and by others which I have not time to mention, cannot at present be avoided and do not come within the classes I have so far mentioned. What can we do about them? Again, I doubt very much the value of fining and imprisonment in these cases.
I want to refer briefly to an experiment which is going on in my constituency. It is a voluntary experiment, which has been started by the Salvation Army, and which has had some notice in the local and national Press. A home has been established named Abbotsford, and into it the Salvation Army are taking mothers and children in whose cases there has been neglect. There they are training the mothers in how to manage both the home and the children and how to overcome the many difficulties with which they are faced. Only in remedial work of this kind, it seems to me, shall we find the solution of the problem which we are discussing tonight. I am very glad that it


should be in my constituency that this experiment has been started, and I should like to say how much those of us in Plymouth, at any rate, appreciate this pioneering work of the Salvation Army.

8.42 p.m.

Brigadier Medlicott: It is always a good thing for us to maintain a sense of perspective, and the hon. Member for the Sutton Division of Plymouth (Mrs. Middleton) has helped, by reminding the House that this is, after all, a limited problem in terms of actual numbers, and that it would be very unfortunate if the impression got about that Great Britain in particular was suffering from the problem of cruelty or neglect to children. The fact is that we see the problem large because we see it through the eyes of our awakened conscience. In many respects, as has already been said, we are probably in advance of any other country in what has been done towards the solution of this problem.
I should like to say how helpful it has been to know that the Home Secretary, who is responsible for dealing with this question, is wholeheartedly in sympathy with the efforts that are being made, and because of this no one has tried to overstate the case. The speeches have all been able to be measured and reasonable speeches because we know that we do not have to convince the right hon. Gentleman of the urgency of what is involved.
There are, however, two aspects which have to be considered—the long-term and the short-term. We have been very shocked in recent years by some examples of cruelty which have been almost unbelievable, and the natural reaction of the public is to ask that heavier and more serious penalties should be imposed in these cases. It may well be that there are cases where, on a short-term view, nothing but punishment of the parents can be considered, but we all realise that that is in fact only the short-term view and that this question goes far deeper and that we have to go into it in a much more patient and scientific way.
It has been said, rightly, I think, that the number of cases of cruelty is relatively small compared with the number of cases of neglect. In regard to neglect, each generation seems to have its own particular difficulty to face. Our grandfathers had the problem of a sleeping conscience on this matter, and the cruelty

of industrial work and in the mines we would regard as inconceivable today.
On the question of neglect we of today have the cinema to cope with and I wonder for how many hundreds of thousands, or millions of hours during the last 20 years, small children have been left alone while their parents have been at the cinema. That is a problem which may be rectified by the increasing growth of television in the home, but it remains to be seen what will be the next factor to distract parents from their homes and from the care of their children, which should be their first consideration.
I must take up a point mentioned by the hon. Member for the Sutton Division of Plymouth. Although housing has a vitally important contribution to make, it is only a part of the solution, as the problem I believe goes far deeper. To most of us the whole question of cruelty to one's own children is almost impossible to understand. There are deep psychological and moral questions involved here which the committee, if set up, may help to go some way towards solving, but we shall never do it alone by material aids, either legislative, or in the form of housing. I remember hearing Dr. Sangster, who preaches just across the road from here, describe a discussion he had with a tenant living on a new housing estate which was supposed to be the last word in every sort of amenity. The tenant said, "We have wonderful houses, good roads, built-in cupboards and refrigerators, in fact everything which could possibly be done for us, has been done, but you can't leave your bike anywhere for five minutes."
That is the sort of problem behind this task, the problem of helping parents to behave in a better way and of understanding the reasons which cause them to behave in a way which, to us, is incomprehensible. I welcome what the hon. Lady said about the importance of bringing the churches into this matter, for a double reason. They have a vast amount of experience in this kind of work and an understanding of it, which is perhaps not given to anyone else. They also have some knowledge of the real depths of the underlying spiritual and moral problems and of the way to their solution.
I believe that a vast amount of good can be done by setting up this committee and I hope that the Home Secretary, if he


decides to accept the Motion, will use his customary skill and wisdom in the selection of the personnel to serve upon it. This may be an occasion upon which, perhaps, a larger rather than a smaller body might be helpful and if they can do something to get down to the deep-seated reasons for this strange and unhappy problem, they will have deserved well of this generation.

8.50 p.m.

Mr. Weitzman: My hon. Friend the Member for North Bradford (Mrs. Nichol) said that the pressure to obtain this official body to inquire into this matter might give a very bad impression about this country. It is because this country is foremost in its love for children and in its desire to see that everything is done for children that this Motion ought to be pressed. The immediate reaction of most people to cases of cruelty to children is one of horrified condemnation of a crime which is apparently as far outside common experience as are sexual assaults. But that very comparison should make us beware. Our feelings may not be as straightforward as we think.
If the horror is justified, we should pause to consider before we condemn, and we should remember that the rich do not appear in court on charges of cruelty to their children. The parties who are usually involved are persons of low mentality and little education, and persons living in poverty and squalor; that is, they are persons in respect of whom the rest of us should feel a certain social guilt, and it is this guilt which often gives emotional force to our condemnation.
In cases in which a person is accused of cruelty to children we must remember that the aims of punishment which apply in the case of other offences still apply. There is the safeguarding of society in general, the rehabilitation of the offender, the deterrence of potential offenders and the punitive element, but in this type of case the primary object is, above all, as it should be, the welfare of the child. As the law stands today it can deal only with cases of cruelty to children which result from certain things or cases of positive malnutrition which can positively be proved—cases of corporal punishment and inadequate protection, for example, living in bad conditions.
We must remember, however, that there are a host of other cases. There is the case of the loveless, neglectful parent, for example, in which the normal development of the child is really destroyed. The law cannot deal with such a case. Those people who do such wonderful work in our child guidance clinics are very familiar with cases in which, because of neglect, often through ignorance perhaps, and with the best of intentions, disastrous effects are produced in children. Again, under the law as it is today, these cases cannot be dealt with. It is obvious that the law is very limited in the scope of its application to cases of this kind. When we reach a state of law such as that, because all law represents the state we have reached, it is essential that when we find an evil there should be a detailed inquiry into the causes and into what can be done in order to deal with what has happened.
I wish to mention a recent case in which a mother neglected two children, whom she left in blankets soaked in urine while she went to the cinema. She had been warned once before, and she was sent to prison for a month. Many people might consider that to be a light punishment of shameful neglect, but there are other factors in the case. She was allowed £3 10s. a week by her husband. There was not much latitude in her domestic arrangements. Her husband was out of work a good deal; the domestic atmosphere was not very congenial. She was obviously in a very unenviable position. The neglect of her children was a crime but it was also a symptom. The month's imprisonment might hide the symptom but it could not cure the disease. Society through the magistrate asserted its horror by inflicting that punishment, but it does not offer a cure.
In that case, as in others, there are many issues to be studied. Will the month's imprisonment in that case alleviate the domestic difficulties from which the crime in part arose? Will the mother learn better how to cope with the problems? Will relations with her husband improve? Above all, what will be her attitude, when she comes out of prison, towards her children? During the case this woman said to the magistrate, in regard to a policewoman in court who gave evidence, "She is


not making it any good for me." The magistrate said, "She is not here to make it good for you." For whom was it being made good? Obviously not for the children.
It has been suggested by authorities on this problem that in the case of delinquent children who have a bad home environment, it is better to keep them at home than to transfer them to the care of a foster-parent or to put them in an institution, provided there is some form of supervisory control. The remedy in many cases surely is that something in the nature of child guidance organisations or welfare officers should look into these matters to see why the mother or father, as the case may be, acted in this way, what is the financial position, and so on; because obviously there is something wrong.
I suggest that the proper course is that the law should be called in in some cases but that it should be called in only when it can assist, and that often other measures should be invoked and every endeavour made before the application of the law is sought. We all know that a great deal of work is done by the child guidance clinics, by the child welfare organisations; and considerable tributes have been paid to their work.
The problem is, clearly, a psychological one. Obviously, under our new health system, the aim of which is to build up healthy children in a healthy environment, the state of affairs will be helped, and things will be better; but it is a matter which has very wide issues indeed. It is a matter of vital importance because it deals with the nation of the future. Unlike the hon. Member for North Bradford (Mrs. Nichol), I do not think we ought to be afraid of the fact that we are going to find enormous difficulties, but that we should look to see where are the practical remedies we can apply.
Here is an evil that must be studied from every possible angle, gone into from every possible point of view, so that this nation, which proudly boasts that its treatment of children is such a fine one in so many respects, can go on to see that no aspect of the child problem is neglected. I hope that speedily the Home Secretary will set up a committee, with as wide terms of reference as possible, to go into this problem so that the greatest possible benefit can be done.

8.59 p.m.

Brigadier Prior-Palmer: I think the House and the nation owe a deep debt of gratitude to the hon. Member for North Hendon (Mrs. Ayrton Gould) who moved this Motion today, and also to my noble Friend the Member for Horsham (Earl Winterton) who is to wind up the Debate, and who has been so persistent in this matter. We are here to establish a case for the setting up of a committee. We are not here today to make constructive suggestions as to how to cure some of the evils which exist, and I would say at once that this Motion is in no way an implied or actual criticism of the way in which the voluntary societies, particularly the N.S.P.C.C, have operated over such a long period. Everybody has the greatest admiration for what this organisation has done. I should be the very last person to advocate greater Government control, or an addition to an army of snoopers, but it is clear to everyone, from cases which are brought to light, that despite the magnificent work of the voluntary organisations the situation at the moment is still far from satisfactory.
I suggest that the ill-treatment of children comes under two headings: that of mental cruelty and that of physical cruelty, and of the two there is no doubt in my mind that the former is the most reprehensible, the most prevalent and the most difficult to deal with. The fault obviously lies largely in the field of ignorance, and possibly to a lesser extent in the housing shortage. This House and the nation were shocked by the Curtis Report, and the Government, I think commendably, have taken fairly swift action and a comprehensive view in regard to it.

The Secretary of State for the Home Department (Mr. Ede): Very swift.

Brigadier Prior-Palmer: Very swift, if the right hon. Gentleman prefers it. It is, of course, comparative.
This Motion covers cases which are outside the Report of the Curtis Committee, and in my view the existing child welfare clinics, mothercraft clinics, and so on, are not as yet adequate, as is proved by the number of cases coming before the courts, and others of which one gets to know in the normal course of duties as a Member of Parliament. I do not


consider that a community centre, or any such facilities, take the place of the home for one single second. They must be adjuncts of the home, but they can never take the place of the home.
In my view, the duty of such a committee as is suggested is to report on methods and means of bolstering the happy home and even making it happier. In the final analysis, in the long-term view, the cure comes under the heading of education, but by far the greatest problem for this committee, if it is set up, will be the question of the short-term methods which can be adopted to deal with the existing situation. That will be the most difficult task of all.
I do not tonight propose to make suggestions, although there are many that I should like to make. I do not believe that this Debate is designed for that purpose. This Debate is designed for us to try to establish a case for the setting up of a committee. To those organisations which are already at work in this field I again say that I do not believe the establishment of this committee would in any way interfere with their normal functions. In fact, the report of the committee should make it very much easier for them to continue those functions which they have performed magnificently for such a long time. After all, it is the welfare of the future generations that we have at heart, not the private feelings of any individual or organisation. We are all at one in the object we have in view.
I have a very great respect for the hon. Member for North Bradford (Mrs. Nichol). I have travelled abroad with her on a delegation, and I know the interest that she takes in child welfare; but she really did contradict herself during the course of her speech. She first asked where the committee were to go for the evidence which would be necessary to enable them to formulate any conclusion, but then went on to give us a very comprehensive list of the various people to whom the committee could go to get all the evidence they would want—the home helps, nurses, and visitors. She said that, the statistics are available to us, so why is it necessary to set up a committee? It is necessary for the simple reason that we have not the time to make the recommendations. It is for a small, selected body of experts to collect all the evidence

available and then make their report to the House of Commons. On that day, we can rise in our places, if we are lucky enough to catch Mr. Speaker's eye, discuss the report and make concrete suggestions.
It may be that when the report is read, we shall come to the conclusion that there is nothing that can be done from the official angle, and that all we can do is to strengthen, as far as possible, the hands of the voluntary organisations. I think it unlikely, however, that I should recommend such a thing until I knew all the facts. I dislike very much indeed, having regard to 30 years of Army training, making any constructive suggestions without having the whole of the facts before me. It is in order that we shall have the facts that this Motion has been tabled by the hon. Lady. I support the Motion because I think there has been a prima facie case established for the setting up of a committee, and I hope that the right hon. Gentleman, when he replies, will not only say that a committee is to be set up, but that it will be set up at the earliest possible moment with the widest terms of reference.

9.7 p.m.

Mrs. Leah Manning: I think that the contents of every speech, with one exception, will have proved to my right hon. Friend that there is an outstanding need for a committee of this kind to find out the facts, collate them, and make suggestions as to how we can fill this one remaining gap in child care in this country. We are far from the days when the mothers of this country were exploited, badly fed and ill-educated. Many noble people in all parts of the country—Lord Shaftesbury, Charles Booth, Charles Dickens and Charles Kingsley—made it their life's work to improve the lot of our children. I have just been reading one of the outstanding contributions to children's rights. That is the declaration at Geneva which was put before the League of Nations Union by a friend of mine when I was a student—Eglantine Jebb—which gave to the children a charter of their rights.
As I read this charter, I could not help feeling that in our own country at least nearly all those things had already been accepted. I quite agree with the hon. Member for North Bradford (Mrs. Nichol) and others that we want to make


these things known, that both nationally and internationally the welfare of children has improved during the last century in this country and during the last half century all over the world. It is against that lightening sky that this hard core of dark cases stands out so startlingly and horrifyingly, and even if it were only 100 children, we should have to see that something was done to make their lot less painful, less harmful and less hard.
I am sure that the committee will confine itself to finding out the cases which exist, the reasons which led to this cruelty and how we can deal with them. I would say that very few of these cases of cruelty are due to direct sadism. There are some—we can always pick them out in the papers—but I suggest that the vast majority of them are due to downright fecklessness, irresponsibility and lack of knowledge of how to cope. I know that we are asked to be sympathetic with some of these cases. I look back to my own childhood in the late Victorian and Edwardian days, when there were very large families, but mothers then seemed to know how to cope. Family tradition and family life were something very precious in all homes in those days.
I am not at all sure that one of the things we ought not to be doing—and I hope the committee will do this—is to find out how to get a sense of responsibility into young people intending to marry and set up a family. My hon. Friend the Member for the Sutton Division of Plymouth (Mrs. Middleton) gave a number of excellent suggestions to the committee. I know that we cannot propose what the committee should do, but the suggestions which she put, forward contained some fine and constructive ideas of the way to deal with our young people, and to get them to realise the importance of family life and how precious it is to the nation. Such a realisation would make it unnecessary to take any drastic action against parents.
With all respect for the work that is done by the N.S.P.C.C, on whose behalf the hon. Member for Londonderry (Sir R. Ross) spoke, the society is not good enough, has not the powers and has not the money to deal with this problem. I could give the hon. Member details of a brutal and very sad case which occurred in my constituency. It was in a village

where four children were assaulted by a man With a thick cane. The weals were still to be seen on their buttocks a week after the event. One was not even a child, but was a young woman who was put across a table and beaten in this way. The N.S.P.C.C. cannot bring such a case to court because it is not a' prosecuting society.

Sir R. Ross: Perhaps the hon. Lady will give me particulars.

Mrs. Manning: I will give the hon. Member full particulars. I have not the time at the moment, as several Members still wish to speak. I ask my right hon. Friend to take note of what has been said, and to give us this committee quickly.

9.12 p.m.

Mr. Lipson: I hope the Home Secretary will respond to the appeals that have been made to him from all sides and will agree to set up this inquiry. If he does so, I am sure he will have public opinion behind him, because, as a nation, we love children and hate cruelty, and we hate it most when it is applied to children. I have no misunderstandings about the difficulties that such a committee will have to face if it is to achieve its end, and no illusions that it will be able to abolish all cruelty to children. Because it cannot abolish all cruelty to children that is no reason why an attempt should not be made to put an end to as much as possible.
Valuable suggestions have been made in the course of the Debate as to the course the inquiry should take. I hope the Home Secretary will not put forward, as is often the case, the obvious objections to such an inquiry. I doubt, for instance, whether the Curtis Committee, when it was appointed, was expected by many of us to have the results it was able to achieve. One advantage of an inquiry is that it focuses public attention upon the problem. This is a serious problem and one we are all anxious to see solved. We are woefully ignorant of its nature and its extent. It has been said by some that it is increasing, and by others it is said to be decreasing. Let us see what, at least, are the facts.
I agree with what has been said about the part bad housing plays in this problem. I believe that if we could solve


the housing problem, we should go a long way towards dealing with such cruelty to children as exists. If that brings home an additional reason for dealing with the housing problem it seems to me that an inquiry of this kind would serve a useful purpose. I do not hold any exaggerated opinions of the results that might be achieved by an inquiry, but I believe that it would have results that would justify its appointment. Anyhow, as a result of the inquiry we should know more about the nature of the problem and suggestions would be put forward for dealing with it.
Like others, I have had experience and knowledge of the valuable work which has been done by the N.S.P.C.C. I think that they ought to be among the first to welcome this inquiry, because they have been pioneers. They have worked for a number of years in this field and, as has often happened in this country, voluntary organisations have prepared the way until there has come a time when it has been necessary for the State to take a hand. Whatever the result of an inquiry might be, I think it would strengthen the hands of the N.S.P.C.C. It would bring home to the public the serious nature of the problem, and I hope it would also make clear the N.S.P.C.C.'s contribution and perhaps suggest means by which they, in co-operation with any other action which might be taken, might more effectively carry on their great work.
I believe that this Motion is very well timed, and that we would all feel happier if, when Parliament is prorogued on Friday for the Christmas Recess, we knew that as a result of this Debate, action was being taken to get rid of something which is hateful to us all, which is a blot on our national life, and a great evil in our midst.

9.18 p.m.

Earl Winterton: As has been said earlier, this occasion is a reward for the pertinacity which the hon. Member for North Hendon (Mrs. Ayrton Gould), who moved the Motion, the hon. Member for Barking (Mr. Hastings), who seconded it, and I myself have shown in this matter. May I say that I have found it a pleasure to work with the hon. Member for North Hendon and the hon. Member for Barking in order that we might ventilate this all important subject.

I could not have had better colleagues in this respect.
I want to stress, first, on behalf of those of us who are interested in this matter that what we are asking for tonight is not legislation but an impartial investigation into an admitted evil. I cannot believe that anyone could object to our request being granted. This is, fortunately, one of those rare and felicitous occasions when no party or political views are in conflict, but I want, in the short time available to me before we hear the Home Secretary, to deal with three points arising out of the subject matter of the Debate and upon which there is room for legitimate difference of opinion. To be in accord with what I have described as the non-controversial nature of the Debate, I will preface my statement on them by saying "It seems to me," which is the reverse of being dogmatic.
First, the British give what I believe to be a wholly false impression, especially to foreigners, that they are more interested in preventing cruelty to animals than to children. For instance, there is an extraordinary number of animal welfare societies in existence—about half a dozen—headed by the Royal Society for the Prevention of Cruelty to Animals, all of which are intended to prevent or prosecute instances of cruelty to animals. There is only one society to do the same for children, the National Society for the Prevention of Cruelty to Children.
The other day there was an instance of the extreme interest taken in animal welfare in this country. I only refer to it by way of parenthesis; otherwise I would be out of Order. I mean the alleged bravery of a cat on board H.M.S. Amethyst. The "Daily Mail," with a courage I commend, rather guyed the proceedings by a leading article which it called "Simonology"—in other words, the worship of a cat. It was solemnly suggested that if this cat should die, a fund should be got up in order to provide welfare for other cats at sea in memory of the deceased cat which was alleged to have shown such bravery.
The point of all this is that at the very time when there was all this eulogy of this alleged heroic cat there were only three or four lines in the newspapers of a case of heroism on the part of a small boy, aged eight years, who did his best to rescue another boy from


drowning. He did not succeed, and he was nearly drowned himself. That only got four lines, while Simon was being headlined in almost every newspaper in the land.
The second point is more difficult to deal with and I apologise for dealing with it. Both sides of the House are agreed that there appears to be an astonishing disproportion in the law or in the interpretation of it as regards the different offences against children: A friend of mine, whose name is very well-known for his interest in child welfare and as a magistrate presiding over children's courts—I need not mention his name because I have not his authority to tell the story I have to tell, but most people will know to whom I am referring—sent me the shorthand notes of a case of rape of a small child somewhere in London. I confess that I have not been more horrified by anything than reading the evidence given in court. This child was decoyed into a room and was raped by this man, who was some relation of the family of the child. He received a few months' imprisonment. I am not criticising the sentence, but stating the facts.
At the same time it happened that there was another case, one of a number which are regularly occurring, of a vice which we all condemn, improper conduct between a grown man and two boys. Usually the evidence in those cases where boys of 14 or 15 years are concerned shows that at least to some extent they are consenting parties to the offence. This particular man got several years' imprisonment. Purely in parenthesis I would add that some of us on both sides of the House think that that is another part of the criminal law which needs inquiring into, because some of the people who commit these crimes are literally not right in the head. I was astonished at the difference between these two cases. That is one of the things that an inquiry like this would look into.
The other point I want to make leads me on to slightly controversial ground. To see a group of small children standing in the wet and cold on a winter's night outside a public house shocks me as it does foreigners who are well disposed to us and who are visiting Britain for the first time. Public opinion in France, Belgium and other Western

Union countries would not tolerate such a state of affairs. The House will be amazed by the story I have to tell of the origin of an Act of Parliament.
The Act was brought in in the 1906 Parliament, which was very interested in temperance matters. It prohibited what had hitherto been allowed, children being taken into public houses. It was opposed by one or two of us, including the notorious Mr. Bottomley and myself. I remember in particular being very much chaffed by some members of the Liberal Party on having such a colleague. We said that, however undesirable it was that children should be taken into public houses, this Clause would have the effect merely that parents would leave their children outside in the street. We were told that that suggestion was an insult to the parents of the country, that nothing of the sort would happen and that we were in alliance with the drink trade in trying to give young children the chance to consume alcoholic liquor. Unfortunately, it has been shown that the provisions of that Act, however meritorious they were in intention, had the result that we suggested, and our criticism of that day has been brutally justified. That, again, is one of the matters into which a committee could inquire.
These three contentions which I have advanced are, I submit, some of the many pillars of reinforced concrete which support our overwhelming case for an official inquiry. The British people, although at times afflicted with party political views, continue to possess one of the finest political consciences in the world. I am certain that if an official inquiry proved that there has been an illogical or wrong-headed attitude in regard to these matters in the past, this House, acting for the nation, would find a remedy.
In regard to the objections which have been put up by at least one hon. Member against the holding of such an inquiry, on the ground that this evil is confined to a very few people and that the holding of an inquiry would give the impression abroad that the evil was more widespread than it is, I would reply that there are occasions when dirty linen needs washing in public because that is the only way to convince anybody that it exists. I take the view, which I think is the view of the House as a whole, that the


setting up of an inquiry is an indication of the desire of this House to have the evil properly considered by an official committee. We are faced with a dis-quietening situation, and I think the case for an official inquiry was very well put in the leading article in "The Times" today.
I am bound to say in the presence of my hon. Friends, that in my opinion the secretary of that excellent institution the N.S.P.C.C. has misinterpreted the object of this Debate in his letter to "The Times" today. We seek an official, impartial inquiry into the situation. The N.S.P.C.C. is not a sovereign law-making body as is this House and has no moral or legal locus standi to prevent an inquiry being set up. When legislation is proposed, full consideration would be given to the views of the society, which it is admitted on all sides of the House has done long and meritorious service in the cause of suffering childhood. I would say with emphasis to my hon. Friend the Member for Londonderry (Sir R. Ross) that we cannot at this time of day say that an unofficial society, however administered, staffed and dealt with outside this House, can be a substitute for official action by this House if there is an evil to be remedied.

Sir R. Ross: If the noble Lord listened, as I think he did, attentively to my speech, he will agree that I never attempted to make any case of that nature. If an inquiry is to be held, the society will welcome any good which may come from it.

Earl Winterton: I was not dealing with the speech of my hon. Friend but with the letter of the secretary of the society of which he is a member of the governing body, which was very hostile to the Motion and to the holding of the inquiry. I am very glad to hear that the society has no objection to an inquiry because I could not think it would be otherwise, and I hope that it will take an early opportunity of making that clear because it was certainly not made clear in the letter.
The note on which I want to close, because really in this most useful Debate all the points which need to be made have already been made, is to say that the collective opinion of this House on a

moral issue, aroused as it has certainly been this evening, possesses today as always a strong propulsive power whose influence is felt far beyond these shores. Again and again this House, in its Debates all through its long history, especially when no party issue arises, on matters of this kind, has had an influence quite out of proportion to what may be the attendance in the House at the moment or to the interest which is shown, even the interest shown in the country. It has an influence all over the world, and I believe that that influence has been well exercised tonight.
There is undoubtedly from the House as a whole a clear request for an impartial inquiry into what seems to be a defect in the comprehensive code of law which the country possesses to deal with grave evils, and such an inquiry would in no way derogate from the general very high standard, so rightly paid a tribute to by speaker after speaker, of our treatment of childhood in this country. It is only to deal with this admitted evil that we ask for the inquiry. Knowing, to use an old-fashion term, the right hon. Gentleman the Secretary of State for the Home Department to be a "just man," I warmly commend the terms of the Motion to his notice.

9.33 p.m.

The Secretary of State for the Home Department (Mr. Ede): As the noble Lord the Member for Horsham (Earl Winterton) has said, we have had a useful Debate. It has been an interesting Debate and it has shown in a series of speeches well informed on the subject how deep the interest of the House is in this matter. I am very glad that we have had the Debate conducted on a non-party basis with a general consensus of opinion that this is a subject which merits the attention of the House and of the Government.
The record of the House in recent years in this matter has, I think, been very high indeed, for when my right hon. Friend the Lord President of the Council was filling my Office and caused the inquiry into the death of Denis O'Neill, there was a very strong feeling when the Report was received that serious evils had been revealed and that immediate action was called for. My right hon. Friend set up the Curtis Committee on which my hon. Friends the Member for North Bradford (Mrs. Nichol) and the Member for Bark-


ing (Mr. Hastings) served—they were not Members of this House at the time they were appointed—and when that Report was received, the conscience of the nation was accurately reflected in the feeling of the House.
The Government promoted legislation embodying nearly all the recommendations of that committee in the first available Session. The hon. and gallant Member for Worthing (Brigadier Prior-Palmer) made some comments on the swiftness of the action, but I do not know that we could have been more swift than that. I think we were responding to public opinion in that matter and I am happy to say that the administration of the Act has shown that the local authorities themselves are equally concerned in seeing that a high standard is fixed for the treatment of those children who come within the purview of the children's committees.
Tonight we have had brought to our notice another group of children in whom the House is interested and on whose behalf very strong representations have been made to us. It would be as well that we should get some sense of proportion, as has been asked for both by my hon. Friend the Member for Bradford', North and my hon. Friend the Member for the Sutton Division of Plymouth (Mrs. Middleton), who made what in my opinion was a most balanced and constructive speech.
In the first ten months of 1948, 32 cases were dealt with at assizes and quarter sessions and 849 cases were dealt with in magistrates' courts, making a total of 881 cases. I am glad to say that in the first ten months of this year, although public attention, through this House, has been focussed on this subject, the numbers are 16 cases at quarter sessions and assizes and 705 in magistrates' courts, making a total of 721. I am not producing those figures in any spirit of complacency. Seven hundred and twenty-one cases are far too many and they indicate the nature of the problem with which we have to deal.
I want to draw a quite clear distinction between neglect and cruelty. It is true that the distinction that I draw may not always be found in the existing law, but cruelty I regard as something positive and morally wicked, and to be condemned on those grounds. Neglect may arise from

many causes—I will try to deal with some of them—and I am not saying that it is not blameworthy, but I do not put it into the same moral category as cruelty. Fortunately the number of cases of cruelty, while they of course attract a great deal more attention in the newspapers, are by no means as numerous as the cases that are brought forward of neglect.
We have had many suggestions with regard to the matter and I should like first to deal with the speech of the hon. Member for Londonderry (Sir R. Ross), who quite rightly said that I am very interested in the National Society for the Prevention of Cruelty to Children. I have benefited greatly from their advice and experience in many phases of the work of my office. I recognise that they are a very valuable voluntary organisation, but I am inclined to agree with my hon. Friend the Member for Epping (Mrs. Manning) that with their existing staff they have reached the limit of their usefulness, and the ground that they can cover is not by any means all the ground that might be covered, and should be covered, by such an organisation. For instance, I took the figures he gave, that they had 270 inspectors who made half a million visits. That is 1,850 visits per inspector per annum. With 313 working days, that gives six visits a day, which I should think is about as much as an inspector can do in the course of a day and it means that these people are quite fully employed.
I hope no one will take me as in any way disparaging the work of this society, but I think it does mean that they are not in themselves sufficient to cope with all the cases that undoubtedly exist. While we are very thankful to them for what they do, I would myself think that had they more inspectors and more opportunities they might be able to deal with more cases. I want to commend them particularly for this; that in cases of neglect, especially, they do regard prosecution as the last of the remedies to be applied. We had the case mentioned by my hon. Friend the Member for Stoke Newington (Mr. Weitzman), who spoke of a woman sent to prison for 28 days. I am bound to say that our experience is that such a sentence of imprisonment in such a case does nothing to remedy the undoubted wrong that has been done to the child.
The Governor of Holloway, if the woman goes to Holloway, does her best in all these cases of women committed for child neglect to give them some training in mothercraft. She does the same for women who enter Holloway pregnant, and for the younger women who may be going out to become wives. Everything is done to help them, but, in 28 days, one cannot do very much. That has been particularly the experience of the home at Plymouth which my hon. Friend the Member for the Sutton Division mentioned and with which I will deal later. Twenty-eight days is no use for that purpose. It means that to some extent the home has been disrupted, and, while I do not quite accept the view put forward by one or two hon. Members that the mother goes back feeling a sense of grievance against the children, I am certain that very little has been done to help her constructively towards managing the home better in the future.
I submit to the House—and I think that what has been said tonight by many hon. Members goes to substantiate it—that the great majority of cases of neglect arise from shiftlessness, fecklessness and an inability to cope with domestic situations that rather overwhelm a woman of a not very high intelligence to start with. But let us face this. We must not imagine that child neglect is confined to one class of the community only. There are quite as many children neglected for bridge parties in proportion to the number of women who attend bridge parties as there are from parents going to the cinema. I notice that Mr. J. B. Priestley, in the introduction he wrote for the report of Mrs. Hubback's Committee, said this:
Finally, at the risk of seeming ungrateful, I must add that I feel that this Report, immensely valuable as it is, still remains incomplete without more reference to the neglected child among the well-to-do classes. Such children may possess all the comforts, but they live in a condition of emotional insecurity that is dangerous to themselves and may afterwards be dangerous to society.
The problem that confronts us, therefore, is wide in its scope. I think the speech of my hon. Friend the Member for North Bradford was one that the House ought to hear in a Debate of this kind. It takes some courage to get up and speak against what is the obvious

general emotional feeling of the House. The House will know the story of the bishop who reproved the boy who had not the pluck to be the only one to say his prayers in the dormitory, and the boy retorted, "Would you, my Lord, have the pluck not to say your prayers in a dormitory inhabited by bishops?" My hon. Friend put in front of the House certain practical considerations which we have to bear in mind when we are asked to deal with this problem, for one of our difficulties is to get definition and terms of reference. That is a great difficulty in this case, for hon. Member after hon. Member on both sides of the House has said that what we do not want to do is to establish some form of additional snooping—to use a word of the modern jargon.
I agree. Neither do we want to manufacture additional crimes. What we want to do—again in a phrase used by my hon. Friend the Member for Stoke Newington—is to assert that the primary object we have in view is the welfare of the child concerned. I agree with hon. Member after Member who has said that what we also want to do is to preserve, and especially to improve, the standard of home life in this country. I am quite certain of this, that the reasonably good home is better than the perfect institution or the perfect foster parent. And that, I am quite sure, we must all regard as fundamental.
Therefore, I am disappointed that so little use has been made of the excellent work that has been started by the Salvation Army at Plymouth. I sent round a circular to all magistrates' courts commending this Home and suggesting that the neglectful mother who was obviously capable of improvement should have it made a term of her probation that she attended this home. There was an effort made to start a similar home in London. For two or three months no cases were sent to Plymouth at all and, since the home started earlier this year, only 20 mothers have been sent. Fourteen of these are recorded as being below average. The people in charge of this home—and the Salvation Army have a wide experience that enables them to assess people's character and home-making qualities pretty accurately—said that the women have all been judged to be loving mothers and faithful wives but thoroughly incompetent housekeepers.
They have usually had a number of children at short intervals, and being intellectually dull and physically incapable have gradually sunk under the weight of domestic responsibilities and difficulties. The regular routine and training for both mothers and children has shown remarkably good results. These mothers are allowed to take their children under five years of age with them. I cannot help but think that that is a particularly valuable thing to do in these cases. It avoids the break-up of the home and its keeps the mother in touch with the children, and, after all, her instruction is provided in connection with her own children and not in connection with the celluloid dolls that are sometimes provided in mothercraft centres, which do not squeal if they are held the wrong way and cannot make any effective protest if they are dropped.
I think that this is a very valuable experiment. The results have been quite good and I sincerely hope that other institutions on these lines will be brought into existence, for I am quite certain, and it cannot be too much emphasised, that we desire to help these women, who through lack of individuality and possibly through overwhelming circumstances, have just foundered in their homes. I sincerely hope that there will be a considerable extension of this work as time and opportunity occur.
As a result of the Debate in July I have, as my hon. Friend promised the House, set up a working party inside the Home Office which in addition to members of the staff of my own Department has members of the staff of the Ministry of Education and of the Ministry of Health investigating the problem, and particularly the extent to which the existing law is not being used when it might be used. I am bound to say that some of the cases that have been brought before the House tonight appear to me to have been suitable for action under the existing law. I would point out, for instance, that Section 40 of the Children and Young Persons Act, 1933, is a great deal more capable of being used than would appear to be the case from some of the remarks about it this evening. It says:
If it appears to a justice of the peace on information … laid by any person … that there is reasonable cause to suspect—
that an offence of cruelty or certain criminal acts have been or are being com-

mitted in respect of a child or young person or—and I wish to point out that this is an alternative and is not something for which the first condition has to be fulfilled before the second becomes operative—that a child or young person is being assaulted, ill-treated or neglected in a manner likely to cause him unnecessary suffering or injury to health:
the justice may issue a warrant authorising any constable … to search for the child …
and in doing so to enter any place specified in the warrant.
I am quite certain that one or two of the cases mentioned by my hon. Friend the Member for North Hendon come within the second alternative paragraph, and I regret that there should be any doubt as to the power of a justice to grant a warrant in such a case. If individual cases are reported either to the police or to the N.S.P.C.C. or to my Department I am quite certain that some of them could be dealt with under that paragraph.
The working party is having this ground very carefully surveyed, and I hope that shortly I shall get from it a report on the ground to be covered, on the specific parts of the law which at present are not being adequately used, and on the gaps which exist in the law, which this Debate and the state of the public conscience reveal as being in need of attention by the legislature. I do not imagine that anyone wants a committee for the mere sake of having a committee. On the other hand, I realise that there is a general desire that the public conscience shall feel that the problem is being fully covered.
Therefore, I am authorised to accept the Motion as drafted. If it is found that the work of the people now engaged on the task adequately covers the needs of the situation, and I feel that the advice they tender to us is sufficient for action to be taken, I would respond to the feeling of the House that no time should be lost in dealing with the matter. Therefore, I am not tonight promising that what is called here "an official committee "—by which I understand the hon. Lady to mean people who are not officials—

Mrs. Ayrton Gould: Similar to the Curtis Committee.

Mr. Ede: I wish the hon. Lady had said that, then I should have known what


she really meant, because I gather she does not regard an official committee as a committee of officials.

Mrs. Ayrton Gould: I understood that the Curtis Committee was called an official committee, and I did stress in my speech that we wanted a committee similar to the Curtis Committee. I am sorry if I was not clear.

Mr. Ede: The hon. Lady made it quite clear in her speech, but she is asking the House to pass this Motion, and not her speech.

Earl Winterton: Surely, it is a common term. It does not mean a departmental committee. It means an ordinary committee, but official. It is a common term. It has been used before.

Mr. Ede: I presided over the departmental committee on private schools, which was a committee constituted like the Curtis Committee. I want to assure the House that the Government are fully seized of the state of the public conscience in this matter, and the strong feeling on both sides of the House, and we desire that any steps we have to take shall be taken speedily and effectively, with the fullest possible knowledge in front of us

when we take action. That means that if the work of the party now engaged on it indicates that there are some rather blurred edges, or some places in which we should wish to ascertain what public opinion on the matter may be, we should then proceed by way of some kind of committee mentioned by the hon. Lady. But I have seen too many issues shelved in this House by the appointment of committees, rather than hastened, to make me feel that, of necessity, the appointment of a committee, the promise of an appointment of a committee, when inquiry is already going on, is the only way of getting the best results we want.

Question put, and agreed to.

Resolved:
That, in view of the many cases of cruelty and neglect of children who were not included in the terms of reference of the Curtis Committee, this House calls upon the Government to appoint an official committee to inquire into the extent of the evil and make recommendations for effective prevention and remedial treatment.

Orders of the Day — ADJOURNMENT

Resolved: "That this House do now adjourn."—[Mr. Snow.]

Adjourned accordingly at Ten o'Clock.